Which Automaker is cutting deals?? (It is BMW)
12-02-06, 09:43 PM
#1
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Which Automaker is cutting deals?? (It is BMW)
Guess Who's Cutting Deals
Here's your auto biz quiz: Which carmaker spent the most money per vehicle in October on customer incentives? If you said Ford (F ) or General Motors, (GM ) you're wrong. If you think it's Chrysler (DCX ), you're close, but wrong again. Believe it or not, it's bmw. The company started to spend more on incentives over the summer, but it really sweetened the deals in October. According to auto site Edmunds.com, givebacks cost bmw an average $4,179 per car during October, more than Chrysler's $4,136 a vehicle and more than twice what German rivals Audi and Mercedes-Benz (DCX ) are spending on incentives.
It's not a matter of cash on the hood. When bmw cuts deals, it subsidizes leases, which make up at least 60% of its U.S. sales. The carmaker is offering almost $10,000 in lease subsidies for its flagship 7 Series sedan, Edmunds says, and $6,500 worth of lease support on an X5. Even the 5 Series, with sales up 5% this year, has almost $5,700 in lease subsidies.
Frank Ursomarso, who owns a bmw dealership in Wilmington, Del., says you can drive a new 530i sedan for $489 a month--not much more than what you'd pay to get in the smaller Audi A4. The company says there are good reasons for the deals: a soft car market and the fact that the X5 will be replaced soon. (bmw wants to shed inventory of the old model.) But that explanation doesn't hold for the 7 Series and 5 Series, the current generations of which are less than three years old.
The deals might not last. Executives get their bonuses in December, and Bimmers tend to fly off the lot. So now may be the time to hit the showroom.
http://www.businessweek.com/@@xGc3ZG...9/c4012012.htm
Here's your auto biz quiz: Which carmaker spent the most money per vehicle in October on customer incentives? If you said Ford (F ) or General Motors, (GM ) you're wrong. If you think it's Chrysler (DCX ), you're close, but wrong again. Believe it or not, it's bmw. The company started to spend more on incentives over the summer, but it really sweetened the deals in October. According to auto site Edmunds.com, givebacks cost bmw an average $4,179 per car during October, more than Chrysler's $4,136 a vehicle and more than twice what German rivals Audi and Mercedes-Benz (DCX ) are spending on incentives.
It's not a matter of cash on the hood. When bmw cuts deals, it subsidizes leases, which make up at least 60% of its U.S. sales. The carmaker is offering almost $10,000 in lease subsidies for its flagship 7 Series sedan, Edmunds says, and $6,500 worth of lease support on an X5. Even the 5 Series, with sales up 5% this year, has almost $5,700 in lease subsidies.
Frank Ursomarso, who owns a bmw dealership in Wilmington, Del., says you can drive a new 530i sedan for $489 a month--not much more than what you'd pay to get in the smaller Audi A4. The company says there are good reasons for the deals: a soft car market and the fact that the X5 will be replaced soon. (bmw wants to shed inventory of the old model.) But that explanation doesn't hold for the 7 Series and 5 Series, the current generations of which are less than three years old.
The deals might not last. Executives get their bonuses in December, and Bimmers tend to fly off the lot. So now may be the time to hit the showroom.
http://www.businessweek.com/@@xGc3ZG...9/c4012012.htm
12-02-06, 10:01 PM
#3
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SANTA MONICA, Calif.--Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,257 per vehicle sold in October 2006, down $431, or 16 percent, from September 2006, but up $245, or 12 percent, from October 2005.
Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all manufacturers' various U.S. incentives programs, including subvented interest rates and lease programs, as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used.
The industry's aggregate incentives spending are estimated to have totaled approximately $2.8 billion in October, down from $3.6 billion in September. Chrysler, Ford and General Motors (GM) spent an aggregate of $2 billion, or 72 percent of the total; Japanese manufacturers spent $484 million, or 17 percent; European manufacturers spent $208 million, or eight percent; and Korean manufacturers spent $89 million, or three percent.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,129 per vehicle sold in October, down from $3,687 in September 2006. Compared with last month, Chrysler's incentives spending was up $3 to $4,214 per vehicle sold; Ford's incentives spending was down $845 to $3,278 per vehicle sold; and General Motors decreased its incentives by $676 to $2,497 per vehicle sold.
"Chrysler is offering generous incentives to move the 2006 inventory off their lots, while Ford and GM continue to reduce incentives and make the most of value pricing," remarked Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com.
From September to October, European automakers decreased incentives spending by $147 to $2,419 per vehicle sold; Japanese automakers decreased incentives spending by $300 to $1,074 per vehicle sold; and Korean automakers decreased incentives spending by $105 to $1,715 per vehicle sold.
Comparing all brands, in October Scion spent the least, $66, followed by Honda at $285 per vehicle sold. At the other end of the spectrum, Jeep spent the most, $5,763, followed by BMW at $4,285 per vehicle sold. Relative to their vehicle prices, Jeep and Dodge spent the most, 20.7 percent and 13.7 percent of sticker price, respectively, while Scion and Porsche spent the least at 0.4 percent and 0.8 percent, respectively.
Among vehicle segments, large SUVs had the highest average incentives, $4,800 per vehicle sold, followed by large trucks at $4,564. Compact cars had the lowest average incentives per vehicle sold, $584, followed by sports cars at $942. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 14.8 percent, followed by large SUVs at 12.7 percent of sticker price. Luxury sport cars averaged the lowest, 2.2 percent, followed by sports cars at 3.3 percent of sticker price.
“Even though fuel prices have remained relatively low for a number of weeks, most gas-guzzling vehicles require generous rebates to catch the attention of consumers,” observed Dr. Liu.
Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all manufacturers' various U.S. incentives programs, including subvented interest rates and lease programs, as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used.
The industry's aggregate incentives spending are estimated to have totaled approximately $2.8 billion in October, down from $3.6 billion in September. Chrysler, Ford and General Motors (GM) spent an aggregate of $2 billion, or 72 percent of the total; Japanese manufacturers spent $484 million, or 17 percent; European manufacturers spent $208 million, or eight percent; and Korean manufacturers spent $89 million, or three percent.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,129 per vehicle sold in October, down from $3,687 in September 2006. Compared with last month, Chrysler's incentives spending was up $3 to $4,214 per vehicle sold; Ford's incentives spending was down $845 to $3,278 per vehicle sold; and General Motors decreased its incentives by $676 to $2,497 per vehicle sold.
"Chrysler is offering generous incentives to move the 2006 inventory off their lots, while Ford and GM continue to reduce incentives and make the most of value pricing," remarked Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com.
From September to October, European automakers decreased incentives spending by $147 to $2,419 per vehicle sold; Japanese automakers decreased incentives spending by $300 to $1,074 per vehicle sold; and Korean automakers decreased incentives spending by $105 to $1,715 per vehicle sold.
Comparing all brands, in October Scion spent the least, $66, followed by Honda at $285 per vehicle sold. At the other end of the spectrum, Jeep spent the most, $5,763, followed by BMW at $4,285 per vehicle sold. Relative to their vehicle prices, Jeep and Dodge spent the most, 20.7 percent and 13.7 percent of sticker price, respectively, while Scion and Porsche spent the least at 0.4 percent and 0.8 percent, respectively.
Among vehicle segments, large SUVs had the highest average incentives, $4,800 per vehicle sold, followed by large trucks at $4,564. Compact cars had the lowest average incentives per vehicle sold, $584, followed by sports cars at $942. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 14.8 percent, followed by large SUVs at 12.7 percent of sticker price. Luxury sport cars averaged the lowest, 2.2 percent, followed by sports cars at 3.3 percent of sticker price.
“Even though fuel prices have remained relatively low for a number of weeks, most gas-guzzling vehicles require generous rebates to catch the attention of consumers,” observed Dr. Liu.
Last edited by Gojirra99; 12-02-06 at 10:14 PM.
12-03-06, 10:05 AM
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(ever the defender of BMW stepping in here) 
BMW had some 06s to get rid of in October (I'm still seeing some great deals on the 2006 3-series - including 9-10K off the convertible). A LOT of BMW prospects were/have been waiting on the 328/335 introduction and those older 325/330s were not moving.
Couple this with some GREAT money factors on the 5-series (as I've pointed out, it is not only more expensive than the competition, but the dealer markup is considerably less) and you have some really good numbers (or bad depending on how you look at it).
BUT, I sure would like to see these numbers for everyone at the end of December.... That might be a little more fair.
BMW had some 06s to get rid of in October (I'm still seeing some great deals on the 2006 3-series - including 9-10K off the convertible). A LOT of BMW prospects were/have been waiting on the 328/335 introduction and those older 325/330s were not moving.
Couple this with some GREAT money factors on the 5-series (as I've pointed out, it is not only more expensive than the competition, but the dealer markup is considerably less) and you have some really good numbers (or bad depending on how you look at it).
BUT, I sure would like to see these numbers for everyone at the end of December.... That might be a little more fair.
12-03-06, 03:24 PM
#7
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Correct me if I'm wrong, guys, but I don't ever remember BMW having to use incentives to sell its previous-generation cars. People were lined up to buy them.
The article that LexArazzo posted makes a good point. Chrysler ( including Dodge and Jeep ) has led in incentives for years, primarily because their vehicles, with a few exceptions, tend to be cheaply built and unreliable, and the public, in general, KNOWS that they are cheaply-built and unreliable. So the public buys these products either on looks / power and styling alone ( like the Chrysler 300, PT Cruiser, Dodge Magnum, etc.....) or because the factory heavily subsidizes their sales with incentives.
The article that LexArazzo posted makes a good point. Chrysler ( including Dodge and Jeep ) has led in incentives for years, primarily because their vehicles, with a few exceptions, tend to be cheaply built and unreliable, and the public, in general, KNOWS that they are cheaply-built and unreliable. So the public buys these products either on looks / power and styling alone ( like the Chrysler 300, PT Cruiser, Dodge Magnum, etc.....) or because the factory heavily subsidizes their sales with incentives.
Last edited by mmarshall; 12-03-06 at 03:32 PM.
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12-03-06, 04:00 PM
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Well... back in 1999/2000 we were all stock market rich. My 540ia was sticker and I was LUCKY to find one (same with the GS back then). People had cash and were spending it like crazy. I'd also wager that this stuff (incentives) was not tracked like it is today - so we will never know for sure what they were doing back in 2002 (unless you can find it).
12-03-06, 04:06 PM
#9
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Well... back in 1999/2000 we were all stock market rich. My 540ia was sticker and I was LUCKY to find one (same with the GS back then). People had cash and were spending it like crazy. I'd also wager that this stuff (incentives) was not tracked like it is today - so we will never know for sure what they were doing back in 2002 (unless you can find it).
Last edited by mmarshall; 12-03-06 at 04:11 PM.
12-03-06, 04:22 PM
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Correct me if I'm wrong, guys, but I don't ever remember BMW having to use incentives to sell its previous-generation cars. People were lined up to buy them.
The article that LexArazzo posted makes a good point. Chrysler ( including Dodge and Jeep ) has led in incentives for years, primarily because their vehicles, with a few exceptions, tend to be cheaply built and unreliable, and the public, in general, KNOWS that they are cheaply-built and unreliable. So the public buys these products either on looks / power and styling alone ( like the Chrysler 300, PT Cruiser, Dodge Magnum, etc.....) or because the factory heavily subsidizes their sales with incentives.
The article that LexArazzo posted makes a good point. Chrysler ( including Dodge and Jeep ) has led in incentives for years, primarily because their vehicles, with a few exceptions, tend to be cheaply built and unreliable, and the public, in general, KNOWS that they are cheaply-built and unreliable. So the public buys these products either on looks / power and styling alone ( like the Chrysler 300, PT Cruiser, Dodge Magnum, etc.....) or because the factory heavily subsidizes their sales with incentives.
12-03-06, 04:25 PM
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The previous-generation 540i was a great car. A colleague of mine bought a mint-condition year-old one with the standard non-M engine and M-spec chassis and tires ( yes, BMW sold a few that way ). He let me drive it locally near the office when we went out to lunch ( not enough for a review....that's why I didn't write it up ). NICE car. I wish...so much.....that the new 5-series was still like that.
12-03-06, 04:35 PM
#12
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BUT............you have a point. I have only looked at the new 5-series in showrooms and dealer lots. I haven't actually actually DRIVEN one, though I have driven and reviewed the new smaller 325i.
Perhaps you have just talked me into a formal review. Despite my negative first impressions, I'll try to do one with an open mind. Which model do you have...a new 545?
Last edited by mmarshall; 12-03-06 at 04:38 PM.
12-03-06, 04:56 PM
#14
Lexus Fanatic
I reviewed a new LS460 yesterday ( see my post ). BMW, along with Porsche, traditionally has ( and still does ) lead in steering precision and chassis dynamics, but the new electric power steering in the LS460 approxomates the BMW feel.....and the build quality of the new 460 trounces that of any recent BMW I've seen.
However...see my respose to doug999 above.....I have looked at but not driven the new 5-series. I will probably do a review of one shortly.
However...see my respose to doug999 above.....I have looked at but not driven the new 5-series. I will probably do a review of one shortly.
