At BMW, Money Isn't Moving Much Metal - U.S. Sales Are Falling As Discounts Rise

Timothy Cain
by Timothy Cain
at bmw money isnt moving much metal u s sales are falling as discounts rise

BMW continues to spend industry-leading levels of money to lure luxury car buyers in the United States. Yet November was the twelfth consecutive month in which sales at the BMW Group declined, year-over-year, in the U.S..

Through the first 11 months of 2016, sales at BMW are down 10 percent compared with the same period in 2015; Mini volume is off 11 percent.

According to TrueCar, however, no automaker is spending more in incentives, on a per vehicle basis, than BMW of North America. November 2016 incentives at the BMW Group jumped 25 percent compared with November 2015 yet sales fell 16 percent.

How much cash on the hood do American luxury car buyers want?

MONEY


TrueCar says BMW’s incentive spend rose to $6,279 per vehicle in November 2016. No other major automaker’s incentive spend rose above $4,700 per vehicle last month.

Granted, BMW’s per-vehicle incentive spend was down in November, albeit slightly, compared with the previous month of October.

But November was still the tenth consecutive month in which BMW incentivized with more dollars per vehicle than any other automaker. And even when BMW’s higher prices are taken into account, only Kia (13.2 percent) and Nissan/Infiniti (15.8 percent) top the BMW Group (12.6 percent) in terms of incentive spending as a percentage of the average transaction price.

OUTPUT


Across the lineups at both BMW and Mini, sales are in decline. Passenger car volume at BMW is down 21 percent, not only because of 3 Series/4 Series sales that have tumbled by nearly 34,000 units compared with the first 11 months of 2015, but also because of a 5 Series that’s down 26 percent (and about to be replaced), a 46-percent dive in 6 Series sales, a 29-percent i3 downturn, and a 29-percent Z4 drop.

Mini’s vast car lineup — two and four-door Hardtop, Convertible, top-selling Clubman — recorded a 12-percent decline through 2016’s first 11 months despite the addition of more than 10,000 Clubman sales. Together with the Countryman (down 19 percent) approaching replacement and the Paceman disappearing, total Mini volume is down by more than 6,100 units in 2016. That places Mini on a track for its worst annual U.S. volume since 2011.

BMW’s sports-activity vehicles tell a different story. Although X4, X5, and X6 sales are collectively down 14 percent, surging X1 and X3 sales propelled the BMW utility vehicle division to a 13 percent increase so far this year.

INVENTORY


Supply remains quite tight, however. Automotive News says BMW ended November with only 39 days of SAV supply, indicating a real lack of vehicles available for sale. The industry light truck average is 70 days.

Entering December, always the highest-volume month of the year for BMW, there are only 20,000 X1s, X3s, X4s, X5s, and X6s in stock.

In other words, customers are growing increasingly uninterested in the BMWs that BMW dealers have, no matter how steeply they’re discounted, while there aren’t enough of the BMWs that BMWs customers want.

These are not good problems to have. If BMW doesn’t turn the ship around with a startlingly strong December, sales in 2016 will fall to a four-year annual low even as overall industry pace toward record levels.

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.

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  • JustPassinThru JustPassinThru on Dec 26, 2016

    What has happened here, is that BMW has hit "Peak Kewel." That Valley Girl who's marketing Cadillac as a brand, not a car...she'll be a disaster, but in that price segment she's right. These cars, cars in this rare-air price range, are not being sold as transportation but as images. As Gucci handbags or designer jeans are sold. As the your-brand-is-you generation gets older, and climbs the ladder higher, they take their idea of status, that is you're the sum of all the brand names you have attached...to higher and higher levels. And as it happens, BMW has suddenly become not-so-hip. It happens to all of these brands which are just trends riding on themselves until they fade out crashing on the beach...but here we're watching it. As Cadillac once was the kewel thing, among the non-discretionary, more-money-than-sophistication types who sold controlled substances and rented flesh. So be it. I have a lot of respect for BMW's history and past efforts, but not so much for the current offerings. Behind the brand there SHOULD be substance; but the reality is, better value and often a better package lie in other stores.

  • Chicklet Chicklet on Jun 27, 2021

    1- If one wants one of the few two-door coupes on the market today, the BMW rear windows don't go down. I bought an e-class mercedes instead. 2- These are some seriously ugly grilles, in my opinion. Not even 6k would put me into an ugly car.

  • SCE to AUX Toyota the follower, as usual. It will be 5 years before such a vehicle is available.I can't think of anything innovative from them since the Gen 1 Prius. Even their mythical solid state battery remains vaporware.They look like pre-2009 General Motors. They could fall hard.
  • Chris P Bacon I've always liked the looks of the Clubman, especially the original model. But like a few others here, I've had the Countryman as a rental, and for the price point, I couldn't see spending my own money on one. Maybe with a stick it would be a little more fun, but that 3 cylinder engine just couldn't provide the kick I expected.
  • EBFlex Recall number 13 for the 2020 Explorer and the 2020 MKExplorer.
  • CEastwood Every time something like this is mentioned it almost never happens because the auto maker is afraid of it taking sales away from an existing model - the Tacoma in this instance . It's why VW never brought the Scirrocco and Polo stateside fearful of losing Golf sales .
  • Bca65698966 V6 Accord owner here. The VTEC crossover is definitely a thing, especially after I got a performance tune for the car. The loss of VTEC will probably result in a slower vehicle overall for one reason: power under the curve. While the peak horsepower may remain the same, the amount of horsepower and torque up to that peak may be less overall. The beauty of variable cam lift is not only the ability to gain more power at upper rpm’s on the “big cam”, but the ability to gain torque down low on the “small cam”. Low rpm torque gets the vehicle moving and then big horsepower at upper rpm’s gains speed. Having only one cam profile is now introducing a compromise versus the VTEC setup. I guess it’s possible that with direct injection they are able to keep the low rpm torque there (I’ve read that DI helps with low rpm torque) but I’m skeptical it will match a well tuned variable lift setup.
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