Price Comparison

Mpowah · 09-21-2012, 11:24 AM

Since i'm in banking I love numbers and also like to question price differences in the market. The other day I was in the dealership getting a routine oil change service and saw the price of the new M6 vs. current 6 series and thought to myself "There appears to be a smaller margin between the 6 series and M6 vs. the 3 series and M3."

So I did the math as a percentage and thought that the following was interesting:

Test 1 Base Price Comparison - Highest level 3 series (335 X Drive) vs. M3

335 X Drive = $44,800
M3 Coupe = $60,100

Price Gap as % = M3 is 26% more than the 335 X Drive

650 X Drive = $88.5k
M6 = $106.1k

Price Gap as % = M6 is 26.6% more than the 650 X Drive

So you're probably thinking.. what's the deal both price gaps are nearly the same eh? Well onto test #2..

Test 2 Base Price Comparison - Lowest Level 3 series (328i) vs. M3

328i = $36.5k
M3 Coupe = $60.1k

Price Gap as % = M3 is 39.3% more than the 328i

640i = $74.4k
M6 = $106.1k

Price Gap as % = M6 is 29.9% more than the 640i

So the question is, why does an M3 have a 10% higher price gap vs. the base model 3 series vs. the M6 when comparing to the baseline 6 series...

While there are many answers/thoughts i'll let you reply/post/flame/troll etc

iamcpap · 09-21-2012, 11:30 AM

Base 6 series is more optioned to begin with, so less goes into "making" an M6?

I don't know, it's Friday...

cposk · 09-21-2012, 11:32 AM

Because a base model 3 series is the base model of the BMW fleet, and the base model 6 series is already a significant upgrade above "base" when considering all BMWs.

Mpowah · 09-21-2012, 11:35 AM

I think that's the best response yet "I don't know it's Friday.."

Hansel · 09-21-2012, 12:12 PM

Base model 3s sales are way higher than a base 6 so the profit per car is probably less as volume makes up for it.

Price is also kept lower on the base models as they are designed to be a stepping stone into the brand. Buy and enjoy the 3/brand, move up in models as you get older/make more $ etc.

Moxie · 09-21-2012, 12:43 PM

Price point - M3 & M6 needs to be priced some what in line with the competition.

rdollie · 09-22-2012, 10:29 PM

For fun you should price the new BMW Gran Coupe against the Benz CLS and Audi A7. Seems someone at BMW didn't get the message...

Quote:

Originally Posted by Moxie

Price point - M3 & M6 needs to be priced some what in line with the competition.

Mr. ///M3 RD · 09-23-2012, 10:45 AM

Good post nice work ... now check out the Canadian and Australian differences ... good luck

OldenburgerM3 · 09-23-2012, 10:53 AM

"M3 is 39.3% more than the 328i"

Your price-gap math doesn't translate into English that well... The M3 is, according to the math above, ~60% more than the base 3-series. The price-gap-as-percentage difference is as you say. But you don't specify if the price-gap-percentage is of the 3-Series or M car's price.

I don't think the price-gap percentage is a good idea for comparison, straight percentages would work better. The reason being that those numbers are not very specific, unless commonly used. I suppose in finance that's the case.

Check out the MSRP comparisons in different countries! :-)

MKE_M3 · 09-23-2012, 11:04 AM

if you really want to have fun, Mr. Numbers. Try building a regression model using options as binary values, 0/1, year, milage, perhaps even color as binary inputs, etc to determine what car's represent good prices on the market, and which are overpriced. Then share the model with the forum.

You'll probably need to find at least 30 or 40 cars, but I bet you'll be able to get an R-squared for the model of over 70%.

rdollie · 09-23-2012, 11:09 PM

With n values that low I'd be more concerned with delta R-squared than just R-squared.

Quote:

Originally Posted by jdemetry

if you really want to have fun, Mr. Numbers. Try building a regression model using options as binary values, 0/1, year, milage, perhaps even color as binary inputs, etc to determine what car's represent good prices on the market, and which are overpriced. Then share the model with the forum.

You'll probably need to find at least 30 or 40 cars, but I bet you'll be able to get an R-squared for the model of over 70%.

09-21-2012, 11:24 AM	#1
Mpowah Enlisted Member 8 Rep 44 Posts Drives: 2013 F10 M5 Join Date: Aug 2012 Location: Middletown, Delaware iTrader: (0)	Price Comparison Since i'm in banking I love numbers and also like to question price differences in the market. The other day I was in the dealership getting a routine oil change service and saw the price of the new M6 vs. current 6 series and thought to myself "There appears to be a smaller margin between the 6 series and M6 vs. the 3 series and M3." So I did the math as a percentage and thought that the following was interesting: Test 1 Base Price Comparison - Highest level 3 series (335 X Drive) vs. M3 335 X Drive = $44,800 M3 Coupe = $60,100 Price Gap as % = M3 is 26% more than the 335 X Drive 650 X Drive = $88.5k M6 = $106.1k Price Gap as % = M6 is 26.6% more than the 650 X Drive So you're probably thinking.. what's the deal both price gaps are nearly the same eh? Well onto test #2.. Test 2 Base Price Comparison - Lowest Level 3 series (328i) vs. M3 328i = $36.5k M3 Coupe = $60.1k Price Gap as % = M3 is 39.3% more than the 328i 640i = $74.4k M6 = $106.1k Price Gap as % = M6 is 29.9% more than the 640i So the question is, why does an M3 have a 10% higher price gap vs. the base model 3 series vs. the M6 when comparing to the baseline 6 series... While there are many answers/thoughts i'll let you reply/post/flame/troll etc
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09-21-2012, 11:30 AM	#2
iamcpap Captain 53 Rep 920 Posts Drives: 2010 BMW X5M Join Date: Nov 2011 Location: Chicago, IL iTrader: (7)	Base 6 series is more optioned to begin with, so less goes into "making" an M6? I don't know, it's Friday... __________________ 2010 E70 X5M \| Black \| Black \| Stock for now. 2008 E90 M3 \| Interlagos Blue \| Speed Cloth \| Sold 2011 E92 M3 ZCP \| Space Grey \| Black \| Sold
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09-21-2012, 11:32 AM	#3
cposk Private First Class 15 Rep 154 Posts Drives: 08 IB M3 (E90) , 12 X5d Join Date: May 2012 Location: Annapolis - Maryland iTrader: (1)	Because a base model 3 series is the base model of the BMW fleet, and the base model 6 series is already a significant upgrade above "base" when considering all BMWs. __________________ E46 Auto to 5-Speed Swap
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09-21-2012, 11:35 AM	#4
Mpowah Enlisted Member 8 Rep 44 Posts Drives: 2013 F10 M5 Join Date: Aug 2012 Location: Middletown, Delaware iTrader: (0)	I don't know it's Friday I think that's the best response yet "I don't know it's Friday.."
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09-21-2012, 12:12 PM	#5
Hansel New Member 1 Rep 13 Posts Drives: e92 M3, e30M3-s52, e30-s50 Join Date: Aug 2012 Location: Denver, CO iTrader: (0)	Base model 3s sales are way higher than a base 6 so the profit per car is probably less as volume makes up for it. Price is also kept lower on the base models as they are designed to be a stepping stone into the brand. Buy and enjoy the 3/brand, move up in models as you get older/make more $ etc.
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09-21-2012, 12:43 PM	#6
Moxie Lieutenant Colonel 67 Rep 1,895 Posts Drives: AW 328d Touring/SG 335d Join Date: Jul 2009 Location: North Carolina iTrader: (12)	Price point - M3 & M6 needs to be priced some what in line with the competition.
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09-23-2012, 10:45 AM	#8
Mr. ///M3 RD Happy Camper 613 Rep 7,869 Posts Drives: C63 AMG & 280 SL on Weekends : Join Date: May 2010 Location: GTA, Ontario - Canada iTrader: (0) Garage List 1969 Restored Merce ... [7.50] 2011 M3 Coupe TRADED [7.34] 1987 BMW 535is [1.00] Cars from the Past [6.50] The ///M3 Engine S65 [9.59]	Good post nice work ... now check out the Canadian and Australian differences ... good luck __________________ Cheers, Rolf-Dieter Life will take us to some interesting places, fortunately The ///M3 will too with a many of us know this very well, now my C6.3 AMG with 487 HP does it too ---> Click here for some good stuff I found
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09-23-2012, 10:53 AM	#9
OldenburgerM3 Private First Class 72 Rep 183 Posts Drives: 2011 Jet Black M3 Coupe Join Date: Feb 2011 Location: TX iTrader: (0)	"M3 is 39.3% more than the 328i" Your price-gap math doesn't translate into English that well... The M3 is, according to the math above, ~60% more than the base 3-series. The price-gap-as-percentage difference is as you say. But you don't specify if the price-gap-percentage is of the 3-Series or M car's price. I don't think the price-gap percentage is a good idea for comparison, straight percentages would work better. The reason being that those numbers are not very specific, unless commonly used. I suppose in finance that's the case. Check out the MSRP comparisons in different countries! :-)
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09-23-2012, 11:04 AM	#10
MKE_M3 Lieutenant Colonel 65 Rep 1,705 Posts Drives: 2011 e90 M3 Join Date: Feb 2009 Location: Milwaukee, WI iTrader: (0)	if you really want to have fun, Mr. Numbers. Try building a regression model using options as binary values, 0/1, year, milage, perhaps even color as binary inputs, etc to determine what car's represent good prices on the market, and which are overpriced. Then share the model with the forum. You'll probably need to find at least 30 or 40 cars, but I bet you'll be able to get an R-squared for the model of over 70%. __________________
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