Can someone explain the logic here?
 

Ok, now that the configuration is up on bmwusa and you can build a 320, I am more confused than I previously was. What the heck is the point of the 320 here in the US. 98% of BMW 3 series buyers buy the pre-configured setup on the dealer lot which essentially will include leather seats, power seats, wood trim, moonroof, and possibly navigation. Yes, the sports package is a bargain (especially the m suspension...paired with 180hp :rofl:), but no 320 buyer is going to want a sports package (not that type of buyer). Once you build the 320 the way BMWNA will to stock dealer lots, the numbers aren't that far off. As a matter of fact, the lease is only going to be ~$30 cheaper than a base 328 similarly built (again depending on residual and money factor). What the heck is the point of this?

If BMW follows the Cadillac ATS philosophy expect 40% of sales next year to be 320s. 40% to be 328s. 20% to be 335s.

The question is if the premium package on the 320i is mistakenly not including leather. If it is, then the numbers are off by 1450. If it doesn't include leather, then you are right, pricing is very similar.

We need another thread for this?

In a nutshell, it's a $4,300 Non-Performance Package.

It allows for two customers to stay in BMW showrooms and not run off to competitors:

1. 328i customer that wants a few options, can't take a $499 monthly lease payment. They trade off horsepower for the Tech package or the Sport package, save a few thousand dollars in the process, they're at $399. SOLD.

2. Honda Accord customer that's tired of the same old Japanese car, has recently gotten promoted, just bought a house, takes it at $299 straight-up or adds a package to get to $349. SOLD.

BJ

I can't believe I'm agreeing with BJ again, but he's right. Especially at point #1. A lot of people can't stomach more than $399/month, so the 320i can be the perfect answer.

My mom is in an Acura TL for $369 because in 2012 she couldn't get a 328i with a couple of basic options that were must-haves like a garage door opener and full memory seats.

With the 320i, she's in there comfortably. She's 73, doesn't need 275 horses, now she can trade them for Premium and Technology and have a couple grand to spare.

BJ

BJ, this doesn't make sense. Have you taken a look at what type of 328 sit on the dealer lots these days. I hate to tell you, but there are extremely few Sports and Luxury lines. Most are baseline autos with premium package. There are certain things that must be in a car at this price point. You NEED to add the premium package to the 320 to get a garage door opener and full memory seats (please look at the options). You also need to add leather. The pricing is way too similar and the savings in monthly payment for a lease isn't that much when you actually build the car BMWNA will build it.

Yeah, you can get the car for $34k...only it won't have wood, sunroof, memory seats, leather, etc. What is the point?

There's a $2,750 difference in price between the two cars you built, when you correct for one having metallic paint and the other one not.

What makes you think any fewer 320i buyers will opt for the very affordable sport package than E46 325i buyers, which had very similar engine output and performance numbers? Especially when the price difference becomes $3,950 between a 320i sport package model v a 328i Sport line model.

The build that my mother passed on, too expensive for her:

328i Auto $42,645
Premium
Heated Seats
PDC

The build that my mother would have taken if available:

320i Auto $38,595
Premium
Heated Seats

That's $4,000 less, a 10% savings, simply for trading off horsepower.

Now, if she wanted to put that back into the car, get to that same $42,645 level as the 328i, her build would have looked like this:

320i Auto $42,595
Premium Package
Driver Assistance Package
Lighting Package
Navigation
BMW Assist
Enhanced Bluetooth & USB
Heated Seats

So, instead of running to Acura, she'd have had two choices:

1. Get a 320i with the same options, save $4,000

2. Get a 320i with extra options Driver Assistance Package, Lighting Package, Navigation, BMW Assist, Enhanced Bluetooth & USB for the same money.

And that's the entire point. As I said in the first post, it allows someone to either hit a $299 monthly payment practically stripped -or- to hit a $399 monthly payment fully loaded.

The 320i is a $4,300 Performance Delete Option that allows someone to trade off horsepower for gobs of goodies. It's a very smart move. Would have kept my mom from Acura, thousands of other moms too.

BJ

Please don't forget to post a 73 year old next to an F30:). It is nice to see BMW going after seniors.

To OP, how did you conclude a 320i will lease for just $20 less than a 328i?

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I have found it to be a great resource for Internet forum discussions,


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CA

Ok, bear with me I'm only a medical student and not an MBA. I'm sorry, but I still don't see how this new model makes any sense. Granted there is only one thing more boring to me than thinking about lease payments for an old guy's even older mother (and that would be the three pages of gram positive and gram negative bacteria I have to memorize). But let's see now:

The $38,595 320 is ~$439 a month.
The $42,645 328 is ~$486 a month

When you're already paying ~$17,000 to lease a car for three years, what is another $1,700 more? I just don't see it. Was it really worth BMW rolling in yet another model just to cut the lease price 10%?

Believe me, I understand that "badge whores" will be all over this...but really I can't see it putting a ton more sales in BMW portfolio. 180hp is not enough for this car. I have the same engine in my 528 and my mother has a 328 with the I4. In both cars it is barely enough with the added torque being the mitigating factor. This engine is going to suck, big time.

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In most cases, it will be a ~$30 difference unless BMWFS inflates the residual on the 320. The numbers don't lie...build a few and plug the numbers in a lease calculator. Even in BJ's over-exagerated example above the difference is a little over $40 a month.

I think we will see in a few months (when 320s hit the lots and residuals are announced) that my statistics are not flawed. This whole scenario just doesn't make a bit of sense....not at this price point it doesn't. It's just not as cut and dry as you guys want to make it out to be. Yes, BMW will make some good ads that will pull in buyers using the base MSRP with the 320, but actual numbers based on cars on the lot will be similar to what we are seeing with baseline 328s.

Yeah, I should have compared metallic paint to metallic. Still the lease payment will not be significant enough to draw in as many new customers as you may think once the numbers are crunched.

Yes, the sports package is quite a bargain on the 320 for what you get. Yes, buyers might have jumped all over this...if this was 1999. I don't have the data, but how many 3 series sold actually have the sports "line" nowadays? What good is a sports package if the car is under-powered by today's standards. But yes, i do agree with you and the sports packaged 320 may be the only thing that actually makes sense in this scenario. However, this will only effect (or is it affect) ~1% of actual sales.

Isn't this always the case with a new model? Lease numbers will improve once it's out for a while. And you'll have a higher percentage of buyers in a cheaper model.

I wonder if BMW will include a de badging option in the us with the introduction of the 320?

My numbers came right off BMW's configurator. There is nothing exaggerated about it.

Additionally, the stripper will have deep discounts to hit $299 which is the reason BMW is doing this. You can't go to some random fifth grade lease calculator to see that. If you paid attention to your own image in the very first post, you'd see that BMW is currently offering a 328i with Premium for $369 a month. The 320i will be $299 a month, plain and simple. That $70 means a lot to fixed income retired mom's and debt-laden graduate students as you'll find out.

Like you said, stick to medicine.

BJ

It all depends on what model BMW wants to push to the market.

Personally I find it hard to believe they are willing to cut their profit by up to $4k by replacing their volume seller from 328i to 320i. But if threatened by the cheap models from the competitors, they could easily subsidize the 320i leases, which could easily make a $70+/mo. difference.

Even if your scenario is correct, don't underestimate what $40-$50.00/month can mean. If I had to pay $50.00 more/month for my current 328i, it would not fit in my budget. Second, over a 36 month lease you are talking about $1440.00 to $1800.00. That's not chump change.

the $299 a month deal ( which bj is correct, thats what bmw is aiming for) will reap tsx, a4, accord, altima, etc prospects.
its a sub $300 per month bmw to get them into the showrooms, once that obstacle is crossed, upsell with some packages. its easier to get an edge buyer in at 299, vs even 309.

The 320i build above is missing the leather($1450) and fold-down seat($500?) that the 328i build has, adding those two back to the 320i build yields a net difference of $2k. So it is $2k for 60+HP in 328i.

You are forgetting the fine print in your analysis... the dealer.

When my sister was looking to lease an E92 about 15 months ago I took her to two dealers. One quoted about $57 a month more than the other for exactly the same car. This was a no brainer.

That payment difference of "a little over" $40 a month can easily becomes $60-$70 when the dealer touches that contract. And even when the dealer is taken out of the equation, a difference is "just" $40 a month is enough to sway a potential customer to another car or even brand.

For sure my sister would have done that.

Not if she doesn't care about leather or folding seat it doesn't.

She wants the keyless entry/garage door opener. It's bundled into the Premium packages unfortunately. So another benefit of the 320i is that she doesn't have to pay for leather she doesn't want.

BJ

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