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BMW Used Loaner Vehicles To Defend Their Sales Crown

By William Maley

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  • BMW uses their Dealer Loaner Program to help boost sales

How far would you go to be the best selling automaker in a given class? If you're BMW, you employ a tactic that involves loaner vehicles and dealers to retain your crown as being the best-selling luxury brand in the U.S.

 

Bloomberg is reporting that BMW paid its dealers as much as $1,750 in December to buy BMW vehicles to be used in loaner fleets - vehicles that would be offered to customers who drop off their current vehicle for service. The program worked as BMW edged out Lexus by 1,400 vehicles.

 

Now it should be noted that many automakers have programs like this. But according to folks who spoke with Bloomberg, BMW was very forceful with this program.

 

“Auto companies do things like this all the time to set sales records or make claims that they are the best in show. BMW can beat their chest this year. But you can question whether they did it on the same terms as their competitors,” said Maryann Keller, an independent auto consultant in Stamford, Connecticut.

 

BMW spokesman Kenn Sparks told Bloomberg in an email that the loaner program is "an important part of BMW’s customer-satisfaction and marketing plan,” and the company does periodically give dealers incentives to put new cars in their fleets. Sparks declined to say how much this program helped in terms of sales.

 

But there is a danger with BMW trying to be number one in the luxury car segment. Eric Lyman, senior analyst with TrueCar says BMW's resale value has been slipping. According to TrueCar data, a three-year BMW vehicle retains 48.4 percent of its new car value. Other luxury brands retain 49.8 percent.

 

“The luxury market is only so big.Do they think that if they have more BMWs out there that people will want to buy them even more? There are consequences for this,” said Keller.

 

Source: Bloomberg

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    Veteran

    ccap41

    New Member

    lol sweet, tacky victory BMW. Be proud of that. 

  • Quote
    • Agree 1
    Grand Master

    G. David Felt

    Members

    Just proves BMW and MB are going after Chevy, Ford and Chrysler / Dodge. They are diluting their luxury image.

  • Quote
    • Enthusiast

    William Maley

    Editor

    Just proves BMW and MB are going after Chevy, Ford and Chrysler / Dodge.

     

    That's a bit of a stretch.

     

     

    They are diluting their luxury image.

     

    I agree with this point.

  • Quote

    • balthazar

    In Hibernation

    Even moreso, it shows where their FOCUS is.

  • Quote
    • Mentor

    smk4565

    Members

    Just proves BMW and MB are going after Chevy, Ford and Chrysler / Dodge. They are diluting their luxury image.

    Or, BMW was chasing Mercedes for the lead, so they had to resort to cheap tactics.

     

    BMW outsells Chrysler with ease, they don't need to cheat to beat them.

  • Quote
    • Enthusiast

    William Maley

    Editor

     

    Just proves BMW and MB are going after Chevy, Ford and Chrysler / Dodge. They are diluting their luxury image.

    Or, BMW was chasing Mercedes for the lead, so they had to resort to cheap tactics.

     

     

    Quick note on smk's point, BMW outsold Mercedes by about 3,000 vehicles.

  • Quote
    • Grand Master

    oldshurst442

    Members
    (edited)
    “The luxury market is only so big.Do they think that if they have more BMWs out there that people will want to buy them even more? There are consequences for this,” said Keller.

     

     

    That is the caveat right there though, isnt it?

     

    Exclusivity is but one of the ingredients that defines luxury...

    However,

    One thing that visibility does is rolling publicity. Free advertisement...

     

    When a potential future buyer sees a car on the road, the potential future buyer sees a possible model or brand that he might like to own or a brand he would like to be a part of...

     

    Too exclusive where nobody sees the brand or car and no lust is created...

    Its one thing to see a car in pics, and its another to see it in person in the wild, engine revving, taking corners fast...and if the car is clean and shiny...

     

    And that is if a potential future buyer even sees a car in any picture of any kind...

    Average Joe potential future buyers dont really pursue car magazines either in paper form or internet form to see cars and to read about them...

     

    So...yeah...in a twisted effed up way...if Average Joe potential future buyers see cars on the road that look good, great, fabulous....yeah...it makes them want them...

     

    What a conundrum that is...

     

     

    On the other hand...

    Are BMW CEOs seeing a pattern of declining sales and sales conquests made by Cadillac/Audi/Mercedes-Benz/Jaguar and are affecting BMW sales goals that they want to resort to old GM tactics just to say that they are still on top?

     

    HMMMMM.... :scratchchin:

    Edited by oldshurst442

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    • Veteran

    surreal1272

    Members
    (edited)

    Just proves BMW and MB are going after Chevy, Ford and Chrysler / Dodge. They are diluting their luxury image.

    Or, BMW was chasing Mercedes for the lead, so they had to resort to cheap tactics.

    . .

    Quick note on smk's point, BMW outsold Mercedes by about 3,000 vehicles.

    And part of Mercedes total sales comes from vans. Just saying this is all a matter of perspective and just a shell game that every make plays at one time or another

    Edited by surreal1272

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    • Mentor

    smk4565

    Members

    Well the Sprinter costs more than a 3-series or X1.   Mercedes does split out the vans on their sales chart.  I am not sure for the purposes of the luxury sales race what number people are using.  I do think BMW cars about the sales volume win more than Mercedes does though.  I know Mercedes would like to outsell BMW, but at the same time, Mercedes prices all their cars higher than the rival BMW product, so they'd like to win on product, not price.

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    • Veteran

    surreal1272

    Members
    (edited)

    Well the Sprinter costs more than a 3-series or X1.   Mercedes does split out the vans on their sales chart.  I am not sure for the purposes of the luxury sales race what number people are using.  I do think BMW cars about the sales volume win more than Mercedes does though.  I know Mercedes would like to outsell BMW, but at the same time, Mercedes prices all their cars higher than the rival BMW product, so they'd like to win on product, not price.

    The numbers that MB uses for their sales total includes those vans. The cost of the van is irrelevant btw and again you obviously missed the bigger point of what I was saying because I named your precious Mercedes in my post.

    CLA

    Exactly. Cheaper than any BMW sedan. The GLA is also $2K cheaper than the cheapest BMW CUV (the X1).

     

    Yeah SMK, they are not trying to win on price at all </sarcasm>

    Edited by surreal1272

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    • Newbie

    Suaviloquent

    New Member

    I think the diluting is happening for reals. But largely I think they have realized that customers who want their sedans either just want the badge - get the low lease deals and thus can be moved to the 1 Series maybe because the value equation gets better for those buyers. And that vehicle is more profitable.

     

    While the true enthusiasts spend the money willingly to get the 328, 340, and M Series.

     

    And anyone else is moving to crossovers entirely.

     

    I think it's just one of those things that a brand like this at this stages gets away with because of favoritism.

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