Quote:
Originally Posted by CSBM5
BMW doesn't focus on "selling" new cars to customers in the US anymore since the majority of customers lease their products. BMW vies with Infinity for the title of the most leased brand in the USA at just over 60% overall. As MSRP goes up, the lease penetration does also, such that in some markets the more expensive models might have lease rates of 80+%.
IMO, this "lease customer" is a far, far different one than the traditional purchase customer of the old days. They are essentially like a boutique rental car business customer. They want the latest technology, styling, status (apparently huge emphasis on that one), etc, with no care at all for what traditional BMW buyers have sought after in the past. Track performance? No care. Steering feel? Only if it's light and no trouble to turn. Etc. They also have zero care for how the cars are designed for maintainability nor long term reliability. They especially have zero thought for repair costs out of warranty (lease) period. The latter being the reason something like an Alpina B7 7-series can depreciate over $100k in value in a relatively short period of time.
If the majority of your customers are leasing with no care for many of these formerly important variables, what do you do? Ignore them? I think what they've done is cater to that lease customer and build cars to make it through a CPO warranty period so they can extract value from them at their dealers a second time after coming off that first lease. After that, who cares.
As interest rates come off 5000+ (all known and guessed history) lows, a lot of business plans predicated on the past 10 years of central bank manipulations are falling apart. This of course is the point in time you depart your exec job with a pat on the back for a job well done in the recent past and a huge payout.  |
Except in recent years BMW in US has been cutting back in lease incentives. It's significantly higher to lease the same BMW now compared to 2016.