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Originally Posted by Driver37
Quote:
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Originally Posted by girllikescars
I was informed the car obviously has less profit than a 7 series and margins are slim and that the average margin on an M2 at msrp is $4200 to $5000 which seems reasonable if correct. I feel if you have a local person showing interest and will be using the service department it pays to maintain that relationship as a positive one and sell a rare car at sticker, especially if the customer has done business there before. I absolutely believe in capitalism and market demand but taking one or very few cars and padding the price 5 to 10k and selling to a guy 1000 miles away is small profit for the potential impact on long term reputation in the local market.
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Would you believe it is less than 4K when sold at MSRP? |
YES I ABSOLUTELY WOULD!
I have said for OVER A YEAR that this car is being marketed as a LOSS LEADER and it will be DIFFICULT to obtain due to slow /limited /low production.
Anyone with sales experience knows that a loss leader is an item that makes very little or less profit than other items in the store.
That item is marketed HEAVILY ( hi GIGI!
http://eyesongigi.com )
but then usually kept or available in short supply. It *is* available , which keeps any marketing from being " bait and switch " however the real intent is to drive customers to the business and sell OTHER products that are NOT the loss leader.
In this case.. Other products that make MORE PROFIT per individual sale like
M3
M4
M235i
Any ( or more than likely all ) of these other products probably garner the dealership more profit at MSRP than the M2.... and that is BEFOFE adding options (of which there are a lot more available on the other products not named M2) or specialty options like INDIVIDUAL paint color and EXTENDED leather.
Finally, this process is VERY successful.
A poll in these forums currently shows that more than 50 percent of disappointed M2 buyers will SETTLE/OPT for an M235, an M3 or M4.
Where else can you piss off the buyer but still have a 50 percent chance of getting the sale ?
At your local BMW Dealer that professes to be selling M2.
As customers get tired of waiting for the slow/ low/limited production M2... They will defect to the other three BMW models that are readily available ( and appproximately 1/3 of them will buy Porsche )
From the DEALER perspective , the only way to make more money on a LOSS LEADER is to add profit in labor and parts. On the 1M, many dealers orders it loaded to the gills with 7-8k in options.. With the M2 and it's short option lost in the USA, dealers are adding all possible minor options like " batman" door lights, wheel locks and carbon M inserts and such to the sale. As this process goes on I anticipate that many dealers will throw the M performance parts catalog at their M2 before it arrives, fluffing it up from 52K to 62k or more.
Fattening up the sale with lots of profit from winglets , cf mirror covers for that " M mirror look" , a rear wing, and an MPE exhaust (
plus some port installed labor which also adds nearly as much profit as the parts ) will get a dealer back to the similar level of profit as other cars they have in stock.
If they dealer doesn't care to option the car up, they can simply add a 5k markup. By adding a 5k markup I would bet the profit balloons on an M2 to around what a loaded M4 will fetch.
How am I doing Driver 37 ?
As a customer, I would prefer that the dealer option the HEA or demo car up as opposed to the straight 5-15K money grab. At the very least there is some added value with the options... Even if it's not necessarily appreciated by the first buyer. As a consumer, I understand and have no problem with capitalism, however I do my best to avoid working with or promoting dealers that add markup to a product.