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Go Back   Bimmerfest - BMW Forums > BMW Model Discussions > X Series > X3 F25 (2011 - current)

X3 F25 (2011 - current)
The latest X3 brings some added style and some new features to the BMW SUV family. Talk about the new F25 now!

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  #1  
Old 04-08-2011, 08:53 PM
bmwfans bmwfans is offline
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Mandatory Nav on All May production orders

FYI,
I saw the BMW memo...All orders for X3 28I, X3 35I, must have Nav ordered for production in May and after..............No end date was stated.
I got an April production number date. The thing was that the power lift gate is having supply delays and is Part of the convenience pkg. I had to delete the Conven. pkg or it would delay production into May...Therefore having to order Nav $2100.00 more.
I was lucky to get a production number at all. I had called alot of dealers . They have more sales than slots to build. After promoting the crap out of the X3 and not be able to keep up with the US demand.........Strange
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  #2  
Old 04-08-2011, 11:57 PM
Want the Thrill Want the Thrill is offline
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How can they FORCE you to order the Nav. & why??? Please expain further....
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  #3  
Old 04-09-2011, 12:07 AM
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Evlengr Evlengr is offline
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Sounds more like they are telling their sales group to force add ons to boost profits.

Like buying a motorcycle and being pitched the $500 leather jacket to go with it.
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  #4  
Old 04-09-2011, 10:05 AM
bmwfans bmwfans is offline
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The claim was that it was due to to crisis in Japan, and part shortages..........................Doesn't make much sense...
I think they have a supply shortage of X3's because they are making more money sending them to Europe..More bang for the Euro...
They are trying to boost profits after causing the shortage in the USA.
The Nav will be mandatory on all 5 series as well staring in May,
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  #5  
Old 04-09-2011, 10:35 AM
flyingbyhere flyingbyhere is offline
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Only thing I can think of is if the base unit has unavailable Japan parts or they both have japan components but they have a larger inventory of the NAV systems
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  #6  
Old 04-09-2011, 10:44 AM
AnonCA AnonCA is offline
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"Please be advised that due to the unfortunate incident in Japan, a shortage of supply of microchips has caused a mandatory option addition to several of our models until further notice."

Starting with May production, Option Code 609 (Navigation) or ZP2 (Premium Package 2) will be mandatory until further notice on the following models:
528i, 535i, 535xi

Starting with May production, Option Code 609 (Navigation) or ZTP (Technology Package) will be mandatory until further notice on the following models:

X3 xDrive28i, X3 xDrive35i"





Only explanation received.
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  #7  
Old 04-09-2011, 11:36 AM
Want the Thrill Want the Thrill is offline
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How can a shortage of something make you have to order either the premium or technology package????? If anything, you would think it would make something become UNAVAILABLE!!
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  #8  
Old 04-09-2011, 12:08 PM
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MarcA78 MarcA78 is offline
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Maybe the smaller screen and different controller unit that come with the non-nav cars (like mine) are made in Japan? Smells fishy though.
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  #9  
Old 04-09-2011, 05:52 PM
pault pault is offline
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I was told the same today when I was ordering my X3. Wasn't botheted as I was ordering Nav anyway.
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  #10  
Old 04-09-2011, 08:39 PM
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AzNMpower32 AzNMpower32 is offline
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Quote:
Originally Posted by Want the Thrill View Post
How can a shortage of something make you have to order either the premium or technology package????? If anything, you would think it would make something become UNAVAILABLE!!
That's what I thought. If microprocessors are in short supply, shouldn't tech options be limited rather than forced?

Still sounds fishy to me. I'm aware the automatic tailgate has supply issues but nothing with the sat nav. I mean, the iDrive screen is there as standard anyway in the US.
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  #11  
Old 04-09-2011, 08:57 PM
cer2225 cer2225 is offline
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Quote:
Originally Posted by AzNMpower32 View Post
That's what I thought. If microprocessors are in short supply, shouldn't tech options be limited rather than forced?

Still sounds fishy to me. I'm aware the automatic tailgate has supply issues but nothing with the sat nav. I mean, the iDrive screen is there as standard anyway in the US.
Maybe they will tack on some sort of Nav credit... We can hope right.
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  #12  
Old 04-09-2011, 10:45 PM
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MarcA78 MarcA78 is offline
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Quote:
Originally Posted by AzNMpower32 View Post
That's what I thought. If microprocessors are in short supply, shouldn't tech options be limited rather than forced?

Still sounds fishy to me. I'm aware the automatic tailgate has supply issues but nothing with the sat nav. I mean, the iDrive screen is there as standard anyway in the US.
The screen is smaller if you don't have nav. Not sure if that matters.
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  #13  
Old 04-10-2011, 07:56 AM
tyresmoker tyresmoker is offline
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Added margin for the manufacturer.
Navigation is a very high margin option.
The parts shortage is going to have a ripple effect throughout the global auto industry for quite some time.
They will build less cars as a result. Might as well make more profit on each unit.
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  #14  
Old 04-10-2011, 08:04 AM
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SARAFIL SARAFIL is offline
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"I can't understand why the shortage would force you to have to get an option"

Why is it so hard for everyone to understand that BMW might have supply issues on the parts that are put in cars built WITHOUT navigation systems? If they only have a steady supply of screens and other parts for cars with the navigation system, that is why they are forcing the option until they get a better supply.
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  #15  
Old 04-10-2011, 08:14 AM
tyresmoker tyresmoker is offline
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They have plenty of parts for both models.
BMW is in business to make money by selling cars.
The supply chain shortage has nothing to do with the nav system but might have something to do with paint pigments, engine control
System electronics etc.
As a result, they will need to cut production. Forced high margin option groups is simply a hedge against decreased production output.
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  #16  
Old 04-10-2011, 09:25 AM
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raleedy raleedy is offline
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Quote:
Originally Posted by tyresmoker View Post
they have plenty of parts for both models.
Bmw is in business to make money by selling cars.
The supply chain shortage has nothing to do with the nav system but might have something to do with paint pigments, engine control
system electronics etc.
As a result, they will need to cut production. Forced high margin option groups is simply a hedge against decreased production output.
+1
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  #17  
Old 04-10-2011, 09:43 AM
bmwfans bmwfans is offline
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Quote:
Originally Posted by tyresmoker View Post
They have plenty of parts for both models.
BMW is in business to make money by selling cars.
The supply chain shortage has nothing to do with the nav system but might have something to do with paint pigments, engine control
System electronics etc.
As a result, they will need to cut production. Forced high margin option groups is simply a hedge against decreased production output.
I think your right on the money............
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  #18  
Old 04-10-2011, 11:31 AM
marmite0 marmite0 is offline
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Most think I'm too cynical, but do you really think BMW would be playing that kind of game? I mean if with so many suppliers and paper trails - even if there was even a hint of manipulating the profit margin by offsetting loses due to delays related to the humanitarian disaster in Japan - there would be such a reputation backlash, not to mention legal backlash..

I don't know - if it's something that could never be proved and was always subjective decision, then.. but if they are writing memo's, leaving proof that they are switching options and stating the Japanese catastrophe is cause - it better be true I think...
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  #19  
Old 04-10-2011, 12:00 PM
tyresmoker tyresmoker is offline
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It is not a game at all. It is business. No one is forcing anyone to buy an X3 or 5 series.
It is a simple economic supply and demand issue.
At some point in history, most manufacturers have done the same thing.
Back in the day when Honda had no sitting inventory and the customer took what came in, how many DX standard shift models do you think the factory produced? None. The factory was set on building higher margin LX and EX models.
It is called maximizing resources. BMW is not saying let's force product because of the situation in Japan, they are saying there IS a supplier issue, so let's maximize profits on the units that we can successfully build and deliver.
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  #20  
Old 04-11-2011, 07:50 AM
AnonCA AnonCA is offline
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RE:"Added margin for the manufacturer.
Navigation is a very high margin option."
No disrespect, but I'm not sure if $195 profit would be considered "high-margin" in very many circles
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  #21  
Old 04-11-2011, 07:57 AM
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SARAFIL SARAFIL is offline
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Quote:
Originally Posted by AnonCA View Post
RE:"Added margin for the manufacturer.
Navigation is a very high margin option."
No disrespect, but I'm not sure if $195 profit would be considered "high-margin" in very many circles
no disrespect, but he is referring to BMW's margin. And BMW's cost for this option is far, far below the invoice price for that option. Most options are a profit-center for BMW as there is no or minimal actual extra cost versus the default. The parts on a nav car probably cost them $100 or $200 more than the parts for a non-nav car.
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  #22  
Old 04-11-2011, 08:16 AM
tyresmoker tyresmoker is offline
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Dude, you are confused...I am talking about MANUFACTURERS margins not DEALERS margins you so dilligently looked up on Kelly Blue Book...
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  #23  
Old 04-11-2011, 08:31 AM
AnonCA AnonCA is offline
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What the mnf makes is really no concern of mine and I certainly don't enjoy that level of access. That's up to the Board and the shareholders. My diligence amounted to looking at my pricing sheets in an attempt to engage in the conversation.

Last edited by AnonCA; 04-11-2011 at 08:46 AM. Reason: Civility escaped me for a brief moment. Apologies to all.
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  #24  
Old 04-11-2011, 08:34 AM
AnonCA AnonCA is offline
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Yes, Sarafil's point is correct though. I imagine BMW makes a ton of money on margins and no, I wasn't thinking in those terms.
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  #25  
Old 04-11-2011, 09:02 AM
tyresmoker tyresmoker is offline
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This discussion has been about the manufacturer and the thought process around their decision to adjust ordering procedures. Margin at the dealer level was never considered until you added your perspective.
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