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Discussion Starter #1
BMW's National Dealer Forum chairman, Patrick Womack, was interviewed recently by Automative News and the following article was published January 24, 2019.:typing:

Interesting that BMW NA is requiring Centers to target a double-digit percentage sales increase for 2019, considering that 2018 BMW US sales in 2018 only increased 1.7% year over year.:wow:

With the fleet and USAA program incentive program changes, this lines up with what has been mentioned by our appreciated 'Fester CA's "[BMA NA is] going over BMW's expenses with a small working group of dealers to scrutinize every program and expense to see if it is needed, or if the money can be spent elsewhere".

The stair step program might be terminated as "[t]he dealer forum objects to the tactic because it devalues the brand. It also creates bad behavior, such as selling the car at an initial loss to try to chase a volume target bonus".:banghead:

I posted some of these quotes already under thread Dealers No Longer Allowed to Advertise Discounts from MSRP? #34, but feel this article needed a separate thread.
 

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Instead of "We sell every car at a loss, but we make it up in volume", I fear we're headed toward a model where each Center sells 12 cars a year, each at full MSRP, but gets no gross on the sale because they didn't hit their volume targets (stair-stepped or otherwise). Maybe they can make it up with LoJack and Rusty Jones?

I think it's time for an LCI in BMWNA management....
 

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Discussion Starter #3
Instead of "We sell every car at a loss, but we make it up in volume", I fear we're headed toward a model where each Center sells 12 cars a year, each at full MSRP, but gets no gross on the sale because they didn't hit their volume targets (stair-stepped or otherwise). Maybe they can make it up with LoJack and Rusty Jones?

I think it's time for an LCI in BMWNA management....
Apparently big adjustments are coming to the stair-step incentive program in 2020.

"when you have to make irrational pricing decisions at the end of the month, or at the end of the quarter" https://www.autonews.com/nada-show/bmws-stair-step-review-hot-topic

How come some of us 'festers weren't invited to the meeting this past weekend?:thumbdwn:
 

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If they really want to beat Lexus they need to work on reliability, durability, and maintenance costs.

I have a very distant relative who has done well in life, retired senior VP at a Fortune 500 company. He was always a Mercedes-Benz guy. His company cars were usually S-Class'es replaced every three years. But, he'd buy them from his employer and keep them around as a Frauwagen or to sell to one of his kids. He also keeps two more cars at their winter home in south Florida. I saw him in 2017 for the first time in about 20 years. He's in his mid-80's now. I was looking forward to hearing about his current cars. But, him and his wife are now driving an Acura and a Lexus. He was from very humble beginnings, and he's frugal by nature. He keeps cars about ten years. He said that he no longer had the mental and emotional stamina to own a German car long term.
 

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That lack of stamina is due to the boredom of driving a couch around town ...

;)
Yeah, yeah. He's in his mid-80's. He probably still has more mental ability than 99.98% of the 30 year olds. He got a 1590 out of 1600 on his SAT's and a free ride through college, eventually earning a Ph.D. in Math from Harvard. He was an IT guru before there was IT. Back in the bad old days, all computer work was done by mathematicians. He got bored at his next-to-last job after fixing their IT mess, and told the CEO it was time for him to go find a new challenge. The CEO thanked him for getting them straight, and asked when he got his last company car. It was less than six months before. The CEO said he'd send him the title to the 450SE instead of giving him a gold watch. When your boss gives you an almost new 450SE as a resignation gift, you're kicking.

Him and his family spent a week or so with my family when I was a kid. He was a college professor with a stay-at-home wife and three kids back then. I remember his new 1972 Dodge Polara station wagon that he was so proud of. It was green like this random picture off of the Interwebs, sort of the original Family Truckster. But, he couldn't afford the fancy one with the fake wood on the side like the Griswald's had. They couldn't afford a trip to Wally World, either. So, they came to see his bro-in-law and my aunt for two weeks, and spent part of that with us at my parent's beach place.

I'm pushing 60. I figure I probably only have one more German car in me, too. I never got that VW Beetle I wanted back in the 1970's, ending up with a Rabbit instead. So, I still want that Beetle, but one with an extra 400 h.p. or so, and with six cylinders in the back.
 

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That lack of stamina is due to the boredom of driving a couch around town ...

;)
I was at Barber Motorsports Park a few years ago. The person I was with pointed to a Chrysler mini-van parked behind the museum. He said it belonged to George Barber, now 78, the billionaire who built BMP so he could play with his 1400 motorcycles and maybe a dozen or so vintage Formula One cars. The person I was with works at BMP and knows the guy, and said that he briefly owned an M5, but he got fed up with the maintenance costs and hassles of the car. :dunno:
 

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If they really want to beat Lexus they need to work on reliability, durability, and maintenance costs.

I have a very distant relative who has done well in life, retired senior VP at a Fortune 500 company. He was always a Mercedes-Benz guy. His company cars were usually S-Class'es replaced every three years. But, he'd buy them from his employer and keep them around as a Frauwagen or to sell to one of his kids. He also keeps two more cars at their winter home in south Florida. I saw him in 2017 for the first time in about 20 years. He's in his mid-80's now. I was looking forward to hearing about his current cars. But, him and his wife are now driving an Acura and a Lexus. He was from very humble beginnings, and he's frugal by nature. He keeps cars about ten years. He said that he no longer had the mental and emotional stamina to own a German car long term.


Does your distinct relative have a Lexus in their South Florida house?
I won’t be surprised if they did.
1. Everyone is South Florida drives a Lexus.
2. Lexus dealers in south Florida are much better than their Mercedes and BMW counterparts


Sent from my iPhone using Bimmerfest mobile app
 

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Please delete this was a duplicate
 

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Yeah, yeah. He's in his mid-80's. He probably still has more mental ability than 99.98% of the 30 year olds. He got a 1590 out of 1600 on his SAT's and a free ride through college, eventually earning a Ph.D. in Math from Harvard. He was an IT guru before there was IT. Back in the bad old days, all computer work was done by mathematicians. He got bored at his next-to-last job after fixing their IT mess, and told the CEO it was time for him to go find a new challenge. The CEO thanked him for getting them straight, and asked when he got his last company car. It was less than six months before. The CEO said he'd send him the title to the 450SE instead of giving him a gold watch. When your boss gives you an almost new 450SE as a resignation gift, you're kicking.

Him and his family spent a week or so with my family when I was a kid. He was a college professor with a stay-at-home wife and three kids back then. I remember his new 1972 Dodge Polara station wagon that he was so proud of. It was green like this random picture off of the Interwebs, sort of the original Family Truckster. But, he couldn't afford the fancy one with the fake wood on the side like the Griswald's had. They couldn't afford a trip to Wally World, either. So, they came to see his bro-in-law and my aunt for two weeks, and spent part of that with us at my parent's beach place.

I'm pushing 60. I figure I probably only have one more German car in me, too. I never got that VW Beetle I wanted back in the 1970's, ending up with a Rabbit instead. So, I still want that Beetle, but one with an extra 400 h.p. or so, and with six cylinders in the back.
Your friend got stiffed by his CEO; one of our ex-neighbors retired from an aerospace company and was given a (new) Bentley Continental convertible as a retirement gift (after his retirement party at the National Air and Space Museum). Unreal.
 

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Does your distinct relative have a Lexus in their South Florida house?
I won't be surprised if they did.
1. Everyone is South Florida drives a Lexus.
2. Lexus dealers in south Florida are much better than their Mercedes and BMW counterparts


Sent from my iPhone using Bimmerfest mobile app
Probably. But, he didn't mention any other cars, just the two rice burners they have in Chicago.

A lot of the well-heeled snowbirds have their cars shipped for the semi-annual migration. I used to go up and down I-95 a lot for work. During snowbird migration season, I'd see a lot of car carriers loaded up with M-B's, Lexi, BMW's, a few RR's and Bentley's. They'd still have tags on them, though.

But, some of the well-heeled snowbirds also enjoy driving for their migrations. It gives them a sense of accomplishment. You'd also see a few RR's and Bentley's at interstate rest stops, Hampton Inn's, and Cracker Barrel's. Even deca-millionaires have to sleep, eat, defecate, and urinate.

My relative's hobby was building furniture. He lives in a snooty neighborhood on the North Shore that prohibited pick-up trucks at one time. So, for a long time his beater/wood and furniture carrier was a cargo-version of a mini-van. I think he's too old now to mess with table saws and such.

One of his neighbors up there was Mr. T. The lots there were huge and wooded. The HOA covenants required approval to remove trees. Mr. T moon-scaped his lot without HOA approval. When confronted about that, his response was "Trees give me allergies... fool!"

My relative's Harvard Ph.D. was concentrated in probability and statistics (P&S). I had a probability problem at work that stumped everybody there for 20 years. It eventually landed on my desk. Plan A was to hand it off to a Math MS new hire who concentrated in P&S. She was scared to tackle it, but she gave he an idea in what direction to go. I thought about calling my relative. But, that would be cheating. I eventually cracked it. When I finally saw my relative again after 20 years, we had something to talk about other than cars. The problem became known as the "Zombie-Claymore" problem:

A house has A windows, each protected by B motion-sensor activated claymores. At night, an unknown number of zombies will attack the house, each going to random window. (Zombies can't get together, make a tactical plan, and attack a particular window and deplete all of that window's claymores, because... well.. they're zombies.)

Given A, B, and C claymore detonations occurring during the night (not knowing which windows had the claymore detonations), how many zombies are likely in the house?

After I solved Zombie-Claymore, I called one of the retired mathematicians who it had stumped for 20 years. He'd been retired about five years. I told him I'd solved it and asked if he'd like to know how I did it. "No, ***damnit! I'm still working on it! Arrrrrrrgh! (Click.)"
 

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Your friend got stiffed by his CEO; one of our ex-neighbors retired from an aerospace company and was given a (new) Bentley Continental convertible as a retirement gift (after his retirement party at the National Air and Space Museum). Unreal.
This guy didn't retire, he just resigned. He'd only been there a few years.

Before going to industry, he was a professor at a state college. He was in a pissing contest with university higher-ups and was on the verge of being fired or forced to resign. He went looking around for a job in industry and quadrupled his salary, and that wasn't counting all the perks (450SE, stock options, profit sharing, bonuses, etc.).

For his second job, he had a box at Wrigley, and a small, private office on the commuter train.

I've known four super-achievers who probably were or became deca-millionaires. Three of the four got that way after being canned from their previous run-of-the-mill jobs. There a lesson in there somewhere.

The fourth one was a senior VP and was expecting to be canned after his company merged with another one. When that happens, half of the senior executives usually get the axe. But, he ended up skipping over his boss (president) to become the CEO. This was back in the 1980's and his salary was around $3M. He was living in a $200k house next door to my mom at the time. It was literally his townhouse, a place to camp out in his new city until he got the boot. He still had a "country house." But, after making it to CEO, he moved into a bigger house. He still drove an Oldsmobile, though. He wife had an old Buick.

One of the deca-millionaires was my old boss. He got laid off when our office moved from Virginia to Florida. He started his own business instead of moving. He struggled for years. But, he got by because his wife had a job with the Department of Agriculture, in the office that pays farmer not to grow stuff. I'm not growing corn this year. Next year, I think I'll not to grow any wheat. But, I'm still waiting to get on the list to not grow peanuts.
 

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Probably. But, he didn't mention any other cars, just the two rice burners they have in Chicago.

A lot of the well-heeled snowbirds have their cars shipped for the semi-annual migration. I used to go up and down I-95 a lot for work. During snowbird migration season, I'd see a lot of car carriers loaded up with M-B's, Lexi, BMW's, a few RR's and Bentley's. They'd still have tags on them, though.

But, some of the well-heeled snowbirds also enjoy driving for their migrations. It gives them a sense of accomplishment. You'd also see a few RR's and Bentley's at interstate rest stops, Hampton Inn's, and Cracker Barrel's. Even deca-millionaires have to sleep, eat, defecate, and urinate.

My relative's hobby was building furniture. He lives in a snooty neighborhood on the North Shore that prohibited pick-up trucks at one time. So, for a long time his beater/wood and furniture carrier was a cargo-version of a mini-van. I think he's too old now to mess with table saws and such.

One of his neighbors up there was Mr. T. The lots there were huge and wooded. The HOA covenants required approval to remove trees. Mr. T moon-scaped his lot without HOA approval. When confronted about that, his response was "Trees give me allergies... fool!"

My relative's Harvard Ph.D. was concentrated in probability and statistics (P&S). I had a probability problem at work that stumped everybody there for 20 years. It eventually landed on my desk. Plan A was to hand it off to a Math MS new hire who concentrated in P&S. She was scared to tackle it, but she gave he an idea in what direction to go. I thought about calling my relative. But, that would be cheating. I eventually cracked it. When I finally saw my relative again after 20 years, we had something to talk about other than cars. The problem became known as the "Zombie-Claymore" problem:

A house has A windows, each protected by B motion-sensor activated claymores. At night, an unknown number of zombies will attack the house, each going to random window. (Zombies can't get together, make a tactical plan, and attack a particular window and deplete all of that window's claymores, because... well.. they're zombies.)

Given A, B, and C claymore detonations occurring during the night (not knowing which windows had the claymore detonations), how many zombies are likely in the house?

After I solved Zombie-Claymore, I called one of the retired mathematicians who it had stumped for 20 years. He'd been retired about five years. I told him I'd solved it and asked if he'd like to know how I did it. "No, ***damnit! I'm still working on it! Arrrrrrrgh! (Click.)"


My parents live in a retirement community in palm beach county. Es350’s and g80’s rule the streets of the palm beach retirement communities. In their development their are some high end bmw’s, MB’s, Audi’s, Tesla’s, Jag’s, and 1 Rolls Ghost.
4 of the top 10 Lexus dealers are in palm beach, dade, and broward county. The largest one sells over 8k new cars a year. Compared to the largest bmw dealer in the country which sells around 3k units a year.
On this site people complain about South Florida bmw dealers where they are know to do max mf markup, 1k docs fees, and over accessorize the cars.


Sent from my iPhone using Bimmerfest mobile app
 

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Discussion Starter #16
LOL, so true.
With a majority of the incentive programs being reduced due to the associated expense, should be interesting if the new 3 series, X5 and X7 can drive the double digit growth this year for the US market. At least the fed didn't rise interest rates today, so the MF should remain stable for the time being. I forecast that the later half of 2019 will see the return of significant incentive money, as BMW NA/FS isn't going to play that much with the residual to drive lease business, as FS wants the portfolio to be balanced that will require low APR's to encourage customer behavior towards traditional financing.
 

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With a majority of the incentive programs being reduced due to the associated expense, should be interesting if the new 3 series, X5 and X7 can drive the double digit growth this year for the US market.* At least the fed didn't rise interest rates today, so the MF should remain stable for the time being**. I forecast that the later half of 2019 will see the return of significant incentive money, as BMW NA/FS isn't going to play that much with the residual to drive lease business, as FS wants the portfolio to be balanced that will require low APR's to encourage customer behavior towards traditional financing.
* These vehicles will indeed drive growth, along with X3 sales. But at the expense of dealer margin to get there, IMO.

** MF stayed the same for February
 

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* These vehicles will indeed drive growth, along with X3 sales. But at the expense of dealer margin to get there, IMO.
Hi MJBrown62, do you think G20 3-Series will have a positive impact on BMW of NA sales goals given the fact the entire compact executive sedan segment continues to experience consistent decline in the U.S.?

As I mentioned in a couple G20 and F30 threads here on Bimmerfest, nothing about the G20 represents anything but a modest evolution from its predecessor - it doesn't bring anything truly noteworthy to the compact executive sedan segment. I just can't envision G20 registering a significant sales increase in the U.S. compared to F30's average annual total in its final three years.

BMW's "X" vehicles are the hot items. I wouldn't be surprised if > 100% of BMW of NA sales growth in 2019 comes from these models.
 

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I wouldn't be surprised if > 100% of BMW of NA sales growth in 2019 comes from these models.
I believe that is is a mathematical certainty that > 100% of growth will be from particular models.
 

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Discussion Starter #20
.... do you think G20 3-Series will have a positive impact on BMW of NA sales goals given the fact the entire compact executive sedan segment continues to experience consistent decline in the U.S.?
Issue is that the G20 330 will arrive as a MY19 in February/March, whereas the G20 M340 will arrive as a MY20 in July/August; thus, it will be a slow roll out and sales will be limited the 1st half of 2019 due to the production ramp-up/shipping from Germany. BMW Mexico production comes online for April/May orders, as this will shorten the transport time. However, the initial MEX builds are constraint, as the following can't be ordered:

Luxury Package
M-Sport Package
Power Tailgate
Rear Seat Heating

Glacier Silver Metallic Paint
Mineral White Metallic Paint
Mediterranean Blue Metallic Paint

1st batch of G20's are shipping out from Germany, which are not constraint.

BMW NA finally was able to shift product allocation to 60% X SAV/SAC vs 40% sedans/coupes/convertibles within the past year, but you're putting "all your eggs in one basket" to achieve double digit sales growth. Plant Spartanburg production is limited by the engine/transmission shipping from Germany/Austria/France.
 
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