BMW’s North American CEO, Bernhard Kuhnt, blames inventory issues for the brand’s sharp utility vehicle sales decline in August 2017.
BMW reported only 8,847 utility vehicle sales in August, a harsh 21-percent year-over-year drop for the five-model lineup. Sales of Spartanburg, South Carolina-built X3s, X4s, X5s, and X6s plunged 30 percent as BMW was fortunately boosted by — strange as it may sound — elevated passenger-car sales.
Has the tide turned? Is America’s BMW buyer forsaking his X3 for a 330i; her X5 for an M550i?
Don’t believe it for a second.
“August numbers were a bit unusual in that sedans outpaced our SAVs,” says BMW boss Bernhard Kuhnt, “as model year change over for the X5 and new model production of the X3 significantly restricted availability of our especially popular SAV models.”
BMW unveiled a third-generation X3 earlier this summer. BMW has huge expectations for the brand’s new compact crossover.
“The No.1 approach and target I clearly have is, there shouldn’t be anyone besides us who is No.1,” global CEO Harald Krueger says of the new X3, placing a great deal of pressure on Kuhnt to leapfrog the Acura RDX, Audi Q5, and Lexus NX while remaining ahead of the Mercedes-Benz GLC and other new members of the field.
But until the new BMW X3 surfaces, expect to see the kind of nosediving volume exhibited in August. Sales last month plunged 38 percent in the United States.
Merging with the X3’s sliding volume at BMW dealers was a 25-percent drop in X5 sales, which Kuhnt blamed on a model-year shift as BMW clears out 2017 X5s in anticipation of 2018s (which will only now begin to trickle into BMW dealers). BMW X6 sales tumbled 41 percent, as well.
Yet despite the Z4’s disappearance, an 80-percent i8 dive, i3 and 7 Series sales that were more than chopped in half year-over-year, and a 9-percent 3 Series decline, BMW’s U.S. car sales volume rose 3 percent in August after falling 15 percent in the first seven months of the year. Most of the credit belongs to, not surprisingly, a brand new car.
The BMW 5 Series launched earlier this year reported a 38-percent sales increase, climbing to 3,587 units in August 2017. The 5 Series accounted for 18 percent of BMW’s U.S. car volume in August 2016; 24 percent in August 2017. In fact, the 5 Series came within five sales of matching the regular class leader, Mercedes-Benz’s E-Class, in August volume. E-Class sales fell 22 percent. The Cadillac CTS was off last year’s pace by 16 percent, the Audi A6 tumbled 30 percent, Jaguar XF volume slid 40 percent, and Lexus GS sales were down 44 percent.
Whether BMW USA can maintain 5 Series sales growth in a market that’s seen car volume fall 12 percent through the first two-thirds of 2017 remains to be seen. More certain is the sales success projected for the X3, X5, and their BMW SAV cohorts.
Much as August’s 21-percent dive in SAV sales was a bother for BMW, “This of course will improve as production ramps up,” says Bernhard Kuhnt. Year-to-date, BMW has lost 16,000 car sales but gained 6,000 SAV sales.
According to ALG, BMW’s average transaction prices rose by more than 1 percent, year-over-year, to $51,231 in August 2017. Compared with August 2016, incentives were down 21 percent from $6,480 to $5,103, equal to 10 percent of the average BMW’s transaction price last month.
[Images: BMW]
Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars and Instagram.
If you took the badges off this X3, lined it up next to three or four of it’s competitors (Forester, Kia, Acura MDX, Mazda, etc.), could anybody tell the difference?
Just baffles me how someone would spend so much money to drive what is essentially a Subaru Forester, but with slightly nicer seats and wheel rims.
Maybe that’s why the sedan market is *allegedly* picking up: people are bored with these yawnfest CUVs that are all identical.
Picking up?
Midsize cars down 17% this year. Large cars down 15% this year. Compact cars down 5% this year. Subcompact cars down 23% this year.
Yea, and it’s hardly like mainstream cars are bristling with character and distinctiveness.
“If you took the badges off this X3, lined it up next to three or four of it’s competitors (Forester, Kia, Acura MDX, Mazda, etc.), could anybody tell the difference?”
Have you ever owned a BMW? If not, then you really shouldn’t be making statements like that.
.
.
My washing machine is better than yours. I know so because I paid more for it.
I can’t remember the last time BMW made something interesting.
Most cars now are commodities; the only thing that separates BMW from a Hyundai or Honda is the badge and the kind of person who buys it.
It’s surprising BMW has seen any sales increase of any of its models considering how they’ve discontinued much of the lease support that used to exist.
Are you sure? BMW has a $339/mo (well $423 after the down payment) 36 month lease on 330is going right now. That’s like $15K. The car’s gonna depreciate by at least $20-23K over that time. I still don’t understand how that business model is sustainable or profitable.
I like my German cars built in Germany, thank you.
SAV?
Smug Azzhole Vehicle?
I keep reading it as a word, as in salve, a medicinal cream.
“Well, I put some X5 SAV on it, and it looks much better today. I think its clearing up!”
…i’m guessing BMW uses the term to differentiate their tall hatchbacks from their tall wagons: ‘activity’, most likely…
I’ve owned/leased four BMW’s since 2010 (3 new, 1 CPO). I didn’t even consider another BMW when I bought my Tahoe in January or when we ordered my wife’s Audi last month.
Why not?
Because BMW North America started a war with its U.S. customers by cancelling/reducing several of the benefits that made ownership an easier choice.
BMW reduced the included maintenance time/term, and removed wear items (pads/rotors most notably) from the program.
BWM reduced the warranty transfer-ability of CPO cars making them less desirable.
BMW financial services eliminated the multiple-security-deposit MF reduction program, raised the lease acquisition fee, ended rolling acquisition into the money factor and it reduced the money-factor benefit of one-pay leases.
I had the honor of working with Bernhard Kuhnt in Europe for JLR. I have FULL confidence in his abilities to turn this around in the US.