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      09-21-2012, 11:24 AM   #1
Mpowah
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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
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Base 6 series is more optioned to begin with, so less goes into "making" an M6?

I don't know, it's Friday...
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      09-21-2012, 11:32 AM   #3
cposk
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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.
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      09-21-2012, 11:35 AM   #4
Mpowah
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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
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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
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Price point - M3 & M6 needs to be priced some what in line with the competition.
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      09-22-2012, 10:29 PM   #7
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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...


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Originally Posted by Moxie View Post
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
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Good post nice work ... now check out the Canadian and Australian differences ... good luck
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      09-23-2012, 10:53 AM   #9
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"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
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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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      09-23-2012, 11:09 PM   #11
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With n values that low I'd be more concerned with delta R-squared than just R-squared.

Quote:
Originally Posted by jdemetry View Post
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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