In May 2016, BMW USA Continues To Pay Price For Success In 2015

Discouraging results at BMW USA persisted in May 2016 as the brand continues to suffer from the successful, and somewhat artificially successful, end to 2015. May sales at the BMW Group tumbled nine percent, with blame largely falling on the shoulders of BMW’s most popular cars and the Mini brand.

BMW’s urge to generate record U.S. sales in 2015 ended with a 2,935-unit margin of victory over Mercedes-Benz, BMW’s chief global rival, and a 1,422-unit margin over Toyota’s Lexus brand.

News of the alleged victory, however, was followed by controversy, as it became increasingly clear that a chunk of BMW’s sales at the end of the year were spurious. “BMW paid its dealers as much as $1,750 a vehicle in December to put new models in their service fleets,” Automotive News reported in February. And without those sales, BMW was not likely the top-selling premium brand in America in 2015 – Lexus was.

Yet beyond the rather unsurprising revelation that BMW was skewing sales figures was the pronouncement from AutoNation CEO Mike Jackson that luxury inventories were ballooning. In order for sales at BMW USA’s namesake brand to rise to an all-time high of 346,023 units in 2015 and for inventory to be cleared out, incentives had to match demand. At BMW, that meant an average of $5,019 in incentives in December 2015, the highest of any automaker, according to TrueCar.

Five months later, BMW incentives remain high and sales are consistently lower than they were during the same period one year ago. Year-over-year, BMW brand volume has decreased in six consecutive months, falling 11 percent since the beginning of December, a period in which overall auto sales grew 3 percent.

BMW’s overall U.S. numbers are certainly not buoyed by healthy Mini results. During the same six-month period, Mini volume tumbled 18 percent, a loss of nearly 5,500 sales.

As for May, specifically, TrueCar says BMW incentivized each sale to the tune of $4,978 last month, the highest of any automaker competing for U.S. sales.

Even with this high level of incentive spend, BMW sales still fell 6.4 percent in May — meaning the brand’s daily selling rate did in fact rise — as industry-wide volume fell 6.1 percent. Year-over-year, sales of the 3 Series, 4 Series, and 5 Series plunged 17 percent, a loss of 2,844 sales not made up by the BMW SAV lineup’s 5 percent, 508-unit uptick.

As we reported one month ago, BMW isn’t the only premium automaker paying a difficult price, or languishing in the throes of a premium Irish flu, after bringing sales forward into 2015.

Through the first five months of 2016, sales at Cadillac are down 12 percent, Acura and Lexus volume is down 5 percent, and both Infiniti and Mercedes-Benz posted modest year-to-date decreases, as well.

Back at BMW, the company is fairly sure it knows what’s going on.

“The shorter number of selling days in May no doubt affected the month totals but the ongoing transition to X models remains clear,” said BMW USA CEO Ludwig Willisch in BMW’s June 1 sales release.

More ess-you-vees needed.

[Image Source: BMW USA]

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.