There's a New Sheriff in Town: BMW Installs New US CEO After Sales Slide and Incentives Soar

Bernhard Kuhnt takes over as the chief executive officer of BMW’s U.S. outpost on March 1, Automotive News reports, replacing BMW’s western hemisphere boss, Ludwig Willisch, who is likely to retire by the end of the decade.

BMW sales grew year after year during Willisch’s tenure, reaching annual records in 2012, 2013, 2014, and 2015. There were, at times, questionable tactics employed to maintain rapid growth.

Yet in 2016, as U.S. auto sales shot to record levels, BMW’s U.S. volume plunged by more than 9 percent. In 12 consecutive months, U.S. sales declined on year-over-year terms. At BMW’s Mini brand, three years after volume climbed to record levels in 2013, sales fell to a six-year low in 2016.

And yet no automaker is incentivizing to such a lofty degree.

Coinciding with Bernhard Kuhnt’s installation in the top post, former vice president for operations, Petter Witt, has moved on to other opportunities with a New Jersey-based 10-store dealer group, Holman Automotive. Kuhnt leaves a role in which he had his fingers in BMW’s sales operations in 80-plus markets, but he has extensive U.S. experience. Kuhnt worked in sales for Mercedes-Benz for more than 25 years before a six-year stint at Jaguar Land Rover.

Kuhnt is now tasked with turning around a greatly suffering brand as consumers turn away from passenger cars. In 2016, while U.S. car sales fell 9 percent, BMW’s car volume plunged 21 percent. The 3 Series and 4 Series, long BMW’s security blanket, combined to lose more than 34,000 sales compared with 2015. The 5 Series, 6 Series, i3, i8, and Z4 all posted additional declines.

All auto brands are now faced with the task of shifting production and inventory levels to meet a shift in demand. BMW utility vehicle volume increased in 2016, but not nearly enough to make up for the dearth of car sales. X4, X5, and X6 sales actually decreased in 2016, as well.

But the shift is underway. BMW has contracted out production of the surging X1, the entry-level crossover, to VDL Nedcar in the Netherlands. Dutch production of the X1 will begin in August and boost supply of a model that accounted for 21 percent of BMW USA’s SAV volume in 2016, up from 12 percent one year before. December, with 4,185 X1 sales, was BMW USA’s best-ever month for X1 volume. Of BMW’s five utility vehicles, the X1 is the only one not assembled in South Carolina.

Across great swathes of the BMW lineup, however, significant discounts are required to move metal. In January 2017, for instance, BMW finally broke the 12-month-long streak of declining sales — with a 0.1-percent, 27-unit uptick — partly due to an average $6,016 in incentives per vehicle sale, according to ALG. To be fair, BMW’s average transaction prices, at $48,732 in January, are among the highest in the industry. Thus, BMW’s incentive spend as a percentage of average transaction price in January was still lower than FCA, GM, Kia, Nissan, and the Volkswagen Group.

Still, BMW’s average incentive spend jumped 44 percent, year-over-year, and the average transaction price slid 3 percent.

A number of factors conspired for BMW to need new U.S. leadership in early 2017. Regardless of the background, Bernhard Kuhnt has his work cut out for him. For the time being, Ludwig Willisch continues in his position at the top of the heap for BMW Group Region Americas.

As for the operations position vacated by Petter Witt, a statement from BMW Personnel says, “Bernhard Kuhnt will have a clear priority to appoint a successor for this position in the period ahead.”

Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.