BMW looks like it has everything going for it. Its sales last year set a new record of 1.37 million vehicles. It's pushed DaimlerChrysler AG's Mercedes-Benz aside to become the second- biggest-selling luxury car brand in the U.S., after Toyota Motor Corp.'s Lexus. It has the kind of cult status among owners other car companies can only envy. And it's taken the low-budget, English Mini Cooper and made it a favorite of the post-college set.
The company's investors, however, aren't satisfied. BMW's stock price was up just 6.7 percent this year as of yesterday's close, while Germany's DAX Index gained 13 percent in the same period. Its profit margin has been stuck in the same place for six years. And competitors are eating away at BMW's market share, with Volkswagen AG's Audi and Lexus growing especially fast.
The best evidence that BMW is looking over its shoulder: It now gives U.S. buyers incentives that average $4,000 a vehicle, almost double what Lexus and Mercedes offer.
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