How does bmw make money selling an M at 100 over invoice..

1cleanm3 · 11-24-2009, 11:04 PM

Hello folks someone fill me in...

How does bmw make money or afford to stay open selling an m3 at invoice? or 100-500 over invoice.

Thanks!

smmmurf · 11-24-2009, 11:05 PM

That's the dealer that's theoretically only making $100 on the car (but dealers have about 5% holdback in addition to invoice that they receive from BMW so they are really making a few thousand).

BMW's cost of making the car is not "invoice."

chris719 · 11-24-2009, 11:09 PM

I'm pretty sure margins aren't what they used to be, especially for the dealers.

1cleanm3 · 11-24-2009, 11:09 PM

im sorry let me rephrase that, how does the dealer make money...

So the dealer gets a couple thousand eventhough they sell at invoice?..

I wonder how much it actually costs bmw to make an m

smmmurf · 11-24-2009, 11:13 PM

Quote:

Originally Posted by Boosted335

im sorry let me rephrase that, how does the dealer make money...

So the dealer gets a couple thousand eventhough they sell at invoice?..

I wonder how much it actually costs bmw to make an m

Yes. ~5% plus whatever financing extras they get (i.e. if you buy the sealant, the LoJack, the wheel/tire insurance, the warranty, etc.).

I don't know how much an M3 costs to make. I'm guessing actual production costs including labor and materials (but excluding R&D) are probably somewhere between 40-50%. This is a totally uneducated guess.

SpencerM3 · 11-24-2009, 11:17 PM

Quote:

Originally Posted by smmmurf

That's the dealer that's theoretically only making $100 on the car (but dealers have about 5% holdback in addition to invoice that they receive from BMW so they are really making a few thousand).

BMW's cost of making the car is not "invoice."

1cleanm3 · 11-24-2009, 11:21 PM

ok so let me get this straight...the dealer actually makes close to 12 percent on a m3?

smmmurf · 11-24-2009, 11:21 PM

Quote:

Originally Posted by Boosted335

ok so let me get this straight...the dealer actually makes close to 12 percent on a m3?

If they sell it at MSRP, that's a good ballpark figure. However, I imagine that many are getting deals near invoice or even under invoice in this market. I bought mine for $1,000's back of invoice.

TonyTone · 11-24-2009, 11:23 PM

Thats weird... offtopic but can you believe down here Chevrolet dealers are still trying to get $1000's over sticker on Camaro

Besides the dealers trying to make extra money...does anyone know the reason behind?

Thanks

smmmurf · 11-24-2009, 11:28 PM

Quote:

Originally Posted by TonyTone

Thats weird... offtopic but can you believe down here Chevrolet dealers are still trying to get $1000's over sticker on Camaro

Besides the dealers trying to make extra money...does anyone know the reason behind?

Thanks

Things are worth what people will pay for them. If the market will bear over MSRP, then the market will bear over MSRP... just look at the Shelby Mustang GT500, GT-R, GT3 RS, and R8.

HappyNDing · 11-24-2009, 11:43 PM

BMW isn't suffering much, that's for sure. They might not have posted profits as they had expected but this economy makes it really tough to sell luxury cars.

As for the dealers, like others said they do get a kick back of around 3-5% for every car they sell and even more if they are able to sell more than a certain of cars per month. Besides, not everybody pays around the invoice price as some buyers don't do much research since they just go into the dealership, pick a car, test drive it and buy it on the spot with maybe a few hundred bucks off MSRP.

rzm3 · 11-25-2009, 12:06 AM

dealers get kickbacks after a certain number of sales... and the more you sell, the more you get back. that's why they can affford to sell cars at very low margins.

MVF4Rrider · 11-25-2009, 12:18 AM

Quote:

Originally Posted by smmmurf

I don't know how much an M3 costs to make. I'm guessing actual production costs including labor and materials (but excluding R&D) are probably somewhere between 40-50%. This is a totally uneducated guess.

Perhaps in other markets using other currencies, but not in the US. In the US, profit margin is very tight. In Europe, profit margin is very normal but sales volume sucks. The US market trades higher unit profit for higher sales volume.

In Germany for example, the car costs about 30% more in US dollars. Therefore comparatively to most other markets we're buying new BMWs for a fraction of the cost in those other markets. And yet we still complain???

py0413 · 11-25-2009, 12:21 AM

Dealership does not need to make money by selling car. They make "huge" money by "servicing" your cars.

AZ-BMW · 11-25-2009, 05:53 PM

Quote:

Originally Posted by HappyNDing

BMW isn't suffering much, that's for sure. They might not have posted profits as they had expected but this economy makes it really tough to sell luxury cars.

As for the dealers, like others said they do get a kick back of around 3-5% for every car they sell and even more if they are able to sell more than a certain of cars per month. Besides, not everybody pays around the invoice price as some buyers don't do much research since they just go into the dealership, pick a car, test drive it and buy it on the spot with maybe a few hundred bucks off MSRP.

I thought that was only if they received high marks on the buyer evaluation form we submit or via phone interview

aus · 11-25-2009, 07:30 PM

Quote:

Originally Posted by py0413

Dealership does not need to make money by selling car. They make "huge" money by "servicing" your cars.

+1

stevenross · 11-25-2009, 09:11 PM

Quote:

Originally Posted by aus

+1

sorry kids.. the holdback is a common dealer thing.. the survey at the end of the sale, i believe has to do with allocation and dealer bonus type of thing..

JDBorges187 · 11-27-2009, 10:36 PM

Quote:

Originally Posted by HappyNDing

BMW isn't suffering much, that's for sure. They might not have posted profits as they had expected but this economy makes it really tough to sell luxury cars.

As for the dealers, like others said they do get a kick back of around 3-5% for every car they sell and even more if they are able to sell more than a certain of cars per month. Besides, not everybody pays around the invoice price as some buyers don't do much research since they just go into the dealership, pick a car, test drive it and buy it on the spot with maybe a few hundred bucks off MSRP.

The latter half of your statement is a little far from the truth in NY/NJ/CT. Really tough sell at couple hundred under MSRP people expect atleast a thousand or two off.

AZ-BMW · 11-28-2009, 06:02 PM

See David at https://www.bmwsonline.com/ for an ED deal that is only few hundred over ED Invoice

After your mini vacation in Europe, take re-delivery at PCD in Spartanburg, SC, then either drive it home or pay to ship it to your doorstep

RL in Florida · 12-01-2009, 12:25 PM

BMW has never offered holdbacks for their dealers, but they do offer other incentives.
And like everyone else says, the dealer makes money off repairs and service too.

11-24-2009, 11:04 PM	#1
1cleanm3 Brigadier General Drives: ///E92M3RR SportPrius Join Date: Feb 2008 Location: the 818 Posts: 3,507 iTrader: (7)	How does bmw make money selling an M at 100 over invoice.. Hello folks someone fill me in... How does bmw make money or afford to stay open selling an m3 at invoice? or 100-500 over invoice. Thanks! __________________ HRE + CHALLENGE + KW V3 + GINTANI + ARKYM + YOKOHAMA AD08
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11-24-2009, 11:05 PM	#2
smmmurf Lieutenant Colonel Drives: 2009 M3 Sedan 6MT Join Date: Feb 2008 Location: Pleasanton, CA Posts: 1,974 iTrader: (7)	That's the dealer that's theoretically only making $100 on the car (but dealers have about 5% holdback in addition to invoice that they receive from BMW so they are really making a few thousand). BMW's cost of making the car is not "invoice." __________________ M3 Sedan LCI - AW/Black - 6MT - no moonroof - no folding seats - RAC RG63 - clear bra by Omega Werks SFR SCCA Spec Miata Champion & driving coach (NASA, NCRC, PTech, private)

11-24-2009, 11:09 PM	#4
1cleanm3 Brigadier General Drives: ///E92M3RR SportPrius Join Date: Feb 2008 Location: the 818 Posts: 3,507 iTrader: (7)	im sorry let me rephrase that, how does the dealer make money... So the dealer gets a couple thousand eventhough they sell at invoice?.. I wonder how much it actually costs bmw to make an m __________________ HRE + CHALLENGE + KW V3 + GINTANI + ARKYM + YOKOHAMA AD08

11-24-2009, 11:21 PM	#7
1cleanm3 Brigadier General Drives: ///E92M3RR SportPrius Join Date: Feb 2008 Location: the 818 Posts: 3,507 iTrader: (7)	ok so let me get this straight...the dealer actually makes close to 12 percent on a m3? __________________ HRE + CHALLENGE + KW V3 + GINTANI + ARKYM + YOKOHAMA AD08

11-25-2009, 12:06 AM	#12
rzm3 Moderator Drives: 2008 M3 Join Date: Aug 2007 Location: IL/TX Posts: 4,569 iTrader: (13)	dealers get kickbacks after a certain number of sales... and the more you sell, the more you get back. that's why they can affford to sell cars at very low margins. __________________ Powered by M-World / AiM Evo4 Data Logger / KW Competition 2-Way / Brembo GT 365 / Pagid Yellow RS-29 / Rear Seats Delete Previous Mods: RBM3 / StopTech 380/355 / Moton Clubsport & Street Sport / Dinan Stage 1 / H&R Sport / M-World GT4 Aero / Eisenmann Sport & Race / Akrapovic Slip-On

11-24-2009, 11:09 PM	#3
chris719 Second Lieutenant Drives: '08 M Roadster Join Date: Oct 2007 Location: NJ Posts: 267 iTrader: (0)	I'm pretty sure margins aren't what they used to be, especially for the dealers.

11-24-2009, 11:23 PM	#9
TonyTone Major Drives: M3 VERT Join Date: Jan 2008 Location: FL Posts: 1,179 iTrader: (0)	Thats weird... offtopic but can you believe down here Chevrolet dealers are still trying to get $1000's over sticker on Camaro Besides the dealers trying to make extra money...does anyone know the reason behind? Thanks

11-24-2009, 11:43 PM	#11
HappyNDing Private First Class Drives: It drives me Join Date: Apr 2008 Location: E. Bay Posts: 161 iTrader: (0)	BMW isn't suffering much, that's for sure. They might not have posted profits as they had expected but this economy makes it really tough to sell luxury cars. As for the dealers, like others said they do get a kick back of around 3-5% for every car they sell and even more if they are able to sell more than a certain of cars per month. Besides, not everybody pays around the invoice price as some buyers don't do much research since they just go into the dealership, pick a car, test drive it and buy it on the spot with maybe a few hundred bucks off MSRP.

11-25-2009, 12:21 AM	#14
py0413 Captain Drives: 2012 M5 Join Date: Jul 2008 Location: BC Posts: 934 iTrader: (2)	Dealership does not need to make money by selling car. They make "huge" money by "servicing" your cars. __________________ Must stop eating..............

11-28-2009, 06:02 PM	#19
AZ-BMW Captain Drives: 2009 M3 E93 w/DCT Join Date: Mar 2007 Location: Sunny, Warm AZ Posts: 971 iTrader: (0)	See David at https://www.bmwsonline.com/ for an ED deal that is only few hundred over ED Invoice After your mini vacation in Europe, take re-delivery at PCD in Spartanburg, SC, then either drive it home or pay to ship it to your doorstep __________________ 2009 AW M3 E93 - Black Novillo\|DCT\|ZTP\|ZPP\|752 Enh Audio\|4UT\|Heated Seats\|6FL\|6NF\| For jpg's: http://www.m3post.com/forums/showthr...=186382&page=4 Traded: 2007 335i E93

12-01-2009, 12:25 PM	#20
RL in Florida Private First Class Drives: 2008 Jet Black M3 Convertible Join Date: Aug 2008 Location: SouthWest Florida Posts: 123 iTrader: (2)	BMW has never offered holdbacks for their dealers, but they do offer other incentives. And like everyone else says, the dealer makes money off repairs and service too.

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