WSJ Catches BMW Goosing Sales Numbers, Misses Volt Goosing

Bertel Schmitt
by Bertel Schmitt
wsj catches bmw goosing sales numbers misses volt goosing

The Wall Street Journal has an extensive report in which Neal Boudette caught BMW cheating with its sales numbers. Boudette unmasked the shocking practice of car makers selling cars to dealers instead to customers: “Hundreds of BMWs counted as sold in July remain in showroom inventories and are still advertised for sale as new cars, according to dealers.” The WSJ dug deeper into the scandal.

The WSJ received reliable information that BMW “made a special offer to dealers on July 31. For one day only, the dealers would receive discounts of as much as $7,000 per 2012-model car as long as each vehicle was reported as sold that day.”

The paper gave BMW spokesman Kenn Sparks the third degree and made him admit that BMW’s “July sales total includes vehicles that were purchased by its dealers for use as what are known as “demos”— cars used on lots for test drives.”

This, says the WSJ, “raises questions about the accuracy of the company’s reported sales, a closely watched figure as BMW and rival Mercedes-Benz vie for the title of top-selling U.S. luxury brand.”

Not that the WSJ is ignorant of shady practices. The WSJ says it has heard of “car companies, which book revenue when they ship to dealers, are known for using a variety of tactics to improve sales beyond what consumers purchase, such as cut-rate deals with rental-car fleets and incentive that get dealers to stock more vehicles than they need.”

The demo deals were news to the WSJ. The paper needs a little training in the time-honored art of number goosing.

The demo deal is an ancient ploy when a sales chief wants to make his numbers. It is just one sample from a rich arsenal of number-enhancing methods. (We encourage our car dealing readers to come forward with the ultimate guide.) As a matter of fact, the WSJ missed another possible scandal. Says the WSJ:

“Last year, General Motors Co. required Chevrolet dealers to stock at least one Volt electric car as a demonstration model and more than 1,000 were shipped as demos. But GM only counted them as sold when they were delivered to customers, a spokesman said.”

Pulled the wool right over your head, Wall Street Journal! In March, there was a sudden spike in Volt sales, which caught many analysts and journalists by surprise. After all, Volt production was on halt due to slow sales. Magazines like Forbes dug for a reason, but came up empty. We heard from a very reliable source that GM gave dealers a sizeable cash bonus if they would sell their existing demo unit, and take a new one. This was a repeat of a similar program at the end of 2011. Shocking I say, shocking!

P.S.: This huge scandal is collateral damage from the war of the luxury models. It is an annual sales race between BMW, Mercedes and Lexus, which appears to be a hobby of the financial press, namely the Journal and Bloomberg. They doggedly track (and probably have office pools on) every lap of this race. Most other countries never heard of this odd spectator sport.

Join the conversation
3 of 11 comments
  • Grunt Grunt on Aug 15, 2012

    The initial Volt units sent to dealers were required to be in demo service for 6 months to keep from being "penalized" for the extra unit which was over and above your allocation at launch. If you sold it prior to the 6 month period expiring you had to immediately replace it with one from stock. Conveniently the Volt was added to the dealer daily rental program this past spring which gives the dealer a $3000 incentive for it being in the program for 3 months, whereas the the demos gave us no allowance.The dealer daily rental is essentially a loaner car for warranty customers. I took mine out of demo and punched it to DDR service at about 3 months and having 4K miles. The other acummulated no miles while waiting for the final 3 months to expire. Punching it to DDR service generates a sale in the GM system, demo status does not.

  • Luke42 Luke42 on Aug 16, 2012

    "P.S.: This huge scandal is collateral damage from the war of the luxury models. It is an annual sales race between BMW, Mercedes and Lexus, which appears to be a hobby of the financial press, namely the Journal and Bloomberg. They doggedly track (and probably have office pools on) every lap of this race. Most other countries never heard of this odd spectator sport." While I suppose this is relevant to the target buyer, I've also hit an income level where many people would expect me to be interested in a luxury car. However, I probably won't be buying one because of the way luxury car owners have treated me in traffic over the years. I don't want people to assume "omigod, there's a guy in a BMW, I bet he's going to be a jackass ... yup, cut me off". Yes, there is a memory effect here (I'm more likely to remember seeing a car that cuts me off), but perception is reality for brands, and this is my perception. I'm not about to pay $40k to join THAT club. The Volt, though, is another matter. I like it because of the interesting tech under the hood. And interior comforts do a surprisingly good job of justifying the higher price. And there's nothing wrong with it being a Chevrolet - and I'd finally be able to Buy American after decades of the majors failing to produce a nice small/efficient car. I'll take the Volt over a BMW every day of the week! P.S. My office parking lot has a surprisong number of $40k+ minivans. They cost as much as a luxury car, and they have most of the same comfort and features. But they're better for hauling kids and they look more modest from the outside. Perfect! It's actually a pretty good statement about the family-friendly culture of the place and what people do with their above-average income.

    • LeeK LeeK on Aug 16, 2012

      Like you, I am always wary of the negative image associated, either fairly or unfairly, with luxury car owners. The perception of arrogance, entitlement, and superiority is one propagated through the car fora as well as in casual conversation with friends and colleagues. Through a set of circumstances mostly out of my control, I ended up with an E90 328i as my daily driver for the past two years. I was quite conscious of the negative aura I was now personally projecting, fully expecting angry raised middle fingers and curses for just going about my daily driving routine. You know what? Absolutely nothing happened. My car wasn't keyed, not a single wayward honk, nor a discouraging word came my way. While I have since sold the BMW (nice car, but I like the friskiness of my new GTI much better), I came away with the realization that this insulated world of automotive enthusiasm perpetuates stereotypes , often for fun (Jeremy Clarkson is a master of it), but the general public for the most part simply doesn't care. The only reaction I ever got was, "nice car". Of course, a-bottom-of-the-US-line BMW doesn't scream "look at me!" the way a Mercedes SLK might, but I found the overall experience much less confrontational than I feared.

  • Sgeffe Why on Earth can’t you just get the torque specs and do it yourself if you’re so-inclined?!
  • Sgeffe As was stated in another comment, the FAA nominee went down in flames. But the NTSB chairwoman certainly didn’t, and she’s certainly not qualified either!Lots of this kind of stuff going on both sides of the aisle—Ben Carson would have arguably made a better Surgeon General than HUD Secretary under Trump, for example.
  • Art Vandelay Interesting, the Polestar 2 I had as a rental utilized Android Automotive which is what GM said it is going to exclusively, yet it still offers Apple CarPlay according to this. Wonder if GM will do the same.
  • Stuart de Baker EVs just aren't ready for prime time for those with a single car and who take road trips. Being able to charge as soon as you arrive at a charging station, and even the chargers working on your car is a crapshoot. In the former case, you could have to wait for nearly an hour while someone else is charging.I also don't find EVs particularly fun to drive (I've driven a Tesla Model S and an Ionic 5.) I LOVE driving my '08 Civic (stick). I love the handling, the feel and responsiveness of the engine, the precise steering (the Michelin Pilot Ultra Sport tires help, but even with the snows on, the car is a joy). I have 152k on the clock, and hopefully another 25 years or so of driving (I was born early in the Eisenhower Administration and I have exceptionally healthy habits), and I'm going to try to keep the Civic for the duration.My Civic causes a less global warming emissions than some of these humongous battery operated trucks.
  • FreedMike They should throw in a Lordstown pickup with every purchase. Make it the “vapor twofer.”