BMW Gets Caught Using 'Demo' Sales to Artificially Boost Sales

GermanNut submitted on 8/15/2012 Official Bell & Ross Timestamp: 11:52:33 AM

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BMW AG BMW.

XE -0.25% recently reported it sold 21,297 of its flagship-brand cars in the U.S. in July. But those numbers are not as straightforward as they appear.The company made a special offer to dealers on July 31. For one day only, the dealers would receive discounts of as much as $7,000 per 2012-model car as long as each vehicle was reported as sold that day.The number of such deals raises questions about the accuracy of the company's reported sales, a closely watched figure as BMW and rival Mercedes-Benz vie for the title of top-selling U.S. luxury brand.

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BMW Gets Caught Using 'Demo' Sales to Artificially Boost Sales

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GermanNut

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User Comments

GermanNut

What a disgrace. BMW should be ashamed of themselves. It doesn't matter in the end because BMW's attempt to offer huge discounts on its cars will hurt their profit margin.

— GermanNut (View Profile)

Posted on 8/15/2012 12:41:31 PM | reply to this comment | Votes: -6   

thetruth01

sleazy

— thetruth01 (View Profile)

Posted on 8/15/2012 2:31:54 PM | reply to this comment | Votes: -4   

Yonder7

I like MB and Audi..but who told us that they are not doing the same...?

— Yonder7 (View Profile)

Posted on 8/15/2012 3:41:30 PM | reply to this comment | Votes: 2   

JRobUSC

Not to piss on your hate parade but every manufacturer does this every month. They have dealers "punch" cars to get them off the books, and in return the dealers may get money, or future allocations, etc. Every. Single. Manufacturer. ALL of them. Yes it includes BMW. It also includes Benz, and everyone else.

— JRobUSC (View Profile)

Posted on 8/15/2012 4:21:48 PM | reply to this comment | Votes: 4   

aarononymous

you're telling me everything, but you're showing me nothing

— aarononymous (View Profile)

Posted on 8/15/2012 11:14:21 PM | | Votes: -2   

enthusiastx11

it's all a part of car sales. that's why the term 'car salesman' is such a derogatory term. with few exceptions, they're all the same.

— enthusiastx11 (View Profile)

Posted on 8/16/2012 12:12:43 AM | | Votes: 1   

JRobUSC

I'm not defending the practice, simply stating a fact. "Everyone does it." You can spin that however you want into an attack on me if it makes you feel superior, but it won't make it any less true. Research it yourself -- go talk to any multi-franchise dealership principle. Whether you like it or want to admit it or not, every manufacturer asks dealers to punch cars in return for concessions from the manufacturer. It's not a secret, it's simply a generally accepted practice in the auto industry. And I suspect that you actually are intelligent enough to know that, even though you so successfully manage to hide it. The only reason anyone is making a big deal about it in this case is because it's BMW, and it's "cool" to bash BMW. "We 'caught' BMW doing business as usual in the auto industry, let's get 'em!!!"

Whatever floats your boat, bud.

— JRobUSC (View Profile)

Posted on 8/16/2012 10:08:54 AM | | Votes: 2   

BMW4me4ever

Wow. Really a auto manufacturer punches or reports cars that aren't sold in order to receive additional incentives to help move the inventory, especially when a model is having trouble selling. I worked for 10 years for a BMW, Mercedes & range Rover dealership in North suburbs of Chicago. Psst. News Flash! They all do it. How do you think Mercedes can discount their New 2013 E350 sedans $5,000 they only have 6% profit? How do dealers and client advisors make a living in a world when the internet or true car or edmunds or kbb, state that a fair price for a car is $1,000 over invoice. That is for a $60,000 car too which is absurb. Yet most of you on here want everything for nothing & expect the client advisor to make $100 to $200 per car. And then come on google.com or some other car forum to complain about your bad treatment. Yet in most cases is that the customer is completely unreasonable and somewhat disrespectful, yet it is our fault as a client advisor since we are the "slimebag" That is the true irony ....

So then you are up in arms " BMW punch cars to inflate their numbers, when in fact every dealer does it & that includes your beloved Lexus, Audi, mercedes, cadillac, bmw, etc ... " The whole article and the ridiculous of some of the statements on here keeps me coming back....

— BMW4me4ever (View Profile)

Posted on 8/16/2012 10:51:55 AM | | Votes: 2   

2ndbimmer

This is accurate. Ive worked for a few different manufacturers(our owners have BMW, MB, Infinit, Honda and Cadillac), every manufacturer does this.
This doesnt stop at car sales either! Look at how many companies post sales reports at quarters that are inflated to get stock to rise. Its competetive out there!

— 2ndbimmer (View Profile)

Posted on 8/17/2012 10:41:22 AM | | Votes: 1   

enthusiastx11

pondo: you're totally right. 'car salesmen' are incredibly upstanding people. only the term 'bmw car salesman' is derogatory. 'lexus car salesman' or 'toyota car salesman' is a term of deep respect connoting the highest ethical principles right?

— enthusiastx11 (View Profile)

Posted on 8/17/2012 12:55:27 PM | | Votes: 0   

enthusiastx11

pondo: furthermore, they just got caught. it's like saying that only lehman brothers bankers were unethical and all the other wall bankers who nearly brought down the world economy are wonderful people because they didn't get caught. open your eyes to the way the world works.

— enthusiastx11 (View Profile)

Posted on 8/17/2012 12:57:19 PM | | Votes: 0   

JRobUSC

"The very reason this was pointed out is because BMW barely beat Benz last year and they are stipulating that THIS was one of the primary reasons i.e. "winning at all costs" so your "everyone does it argument" fails here, simply because everyone else wasn't in the position to claim they were #1 by the slimmest of margins in luxury sales for the year."

my argument doesn't fail because of this. Mercedes was doing the same thing last year, they just came up slightly short. Do you know how much Mercedes spent last year on incentives to try and retake the title while Lexus was down? They had $6k on the hood of every new E-class. They were making up to EIGHT PAYMENTS for current Benz lessees to get them out of existing Benz leases and into new ones. Benz was pulling out ALL the stops last year to finish at #1, and that includes having dealers punch cars, be it into loaner fleets, demo service, or just plain reporting them. And no one said anything. Not because they weren't doing it, but because it's a totally normal occurrence. For everyone, luxury brands included. Welcome to the car business. I don't like it either, but I'm not ignorant enough to pretend it's not happening.

— JRobUSC (View Profile)

Posted on 8/17/2012 8:55:25 PM | | Votes: 0   

Car4Life

Bottom Line, Mercedes Called B.S. on Bimmer sales back in December, but they are over it and know that with the launch of the A class, Next Gen C and S class, refreshed E class, they have got the top spot in the bag!

— Car4Life (View Profile)

Posted on 8/16/2012 10:17:18 AM | reply to this comment | Votes: 0   

BMW4me4ever

Then I have to call B.S. on Mercedes too as our dealer consistently punched cars as service loaners in order to inflate the figures so they could provide you the customer a Mercedes when you came in for service.

— BMW4me4ever (View Profile)

Posted on 8/16/2012 10:54:24 AM | | Votes: 1   

JRobUSC

BMW does that too, BMW4me4ever.

I'm not taking sides, my point was simple: everyone does it. GM, Ford, Chrysler, Toyota, Honda, BMW, Mercedes, etc. Everyone.

— JRobUSC (View Profile)

Posted on 8/16/2012 11:11:20 AM | | Votes: 1   

BMW4me4ever

Jrob, I was agreeing with you saying that every manufacturer does it. Service loaners aren't free. The dealer has to punch the car to put it into service & at the same time remove ones that are in service with higher miles to be able to sell them to the buying public. Most punch cars are for that reason. The rest is usually do to a special year end incentive that the manufacturer offers up to the dealers to help sell them when there is overlap in a model. How else do you think Cadillac can discount the Escalade at times for $12,000?

— BMW4me4ever (View Profile)

Posted on 8/16/2012 11:20:59 AM | reply to this comment | Votes: 2   

Eyecarehawaii

I wonder why the title of "top-selling U.S. luxury brand" is important to car buyers? Are we so enamoured with "keeping up with the Jones'" that if one company has this title then we have to buy that car too? Maybe it gives the companies bragging rights; perhaps stockholders and CEOs care? I personally don't give a rat's a** who has that title. I'll still buy what I want.

— Eyecarehawaii (View Profile)

Posted on 8/16/2012 2:37:39 PM | reply to this comment | Votes: 3   

2ndbimmer

I agree. Who cares. Toyota outsells Ferrari and I would never drive a Toyota!

— 2ndbimmer (View Profile)

Posted on 8/17/2012 10:43:01 AM | | Votes: 1   

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