If You're Thinking of Buying New, Buy NOW!

BC4J · 09-08-2007, 03:38 AM

..for the end is nigh, if the BMW UK MD is to be believed. From this morning's Torygraph:

"BMW puts online brokers on the line. Discounted BMWs will be a thing of the past if BMW UK MD Jim O'Donnell has his way.

He has declared war on brokers who buy cut-price new cars from his dealers and sell them to the public through the internet. He claims the practice is caused by the dealers trying to meet sales targets that trigger incentive payments.

This week internet brokers were offering new BMW models at between £1,000 and £8,000 off the list price. O'Donnell claims this discounting undermines the entire BMW dealer network and the status of BMW as a slow-depreciating car.

"We don't want our dealers to feel under such pressure that they sell to brokers at low cost to meet their targets," says O'Donnell, who readily admits that his organisation is to blame for the situation.""

mikem · 09-08-2007, 03:47 AM

What he doesn`t say is that in order to have a slow depreciating BMW, you have to buy with the biggest discount possible. I lost £4.5K on my 325d M sport in 12 mths and 12K miles (Which in my opinion is perfectly acceptable for a brand new car). However if I`d paid full list price it would of been almost a £9K loss

bob mushroom · 09-08-2007, 04:25 AM

Quote:

Originally Posted by mikem

What he doesn`t say is that in order to have a slow depreciating BMW, you have to buy with the biggest discount possible. I lost £4.5K on my 325d M sport in 12 mths and 12K miles (Which in my opinion is perfectly acceptable for a brand new car). However if I`d paid full list price it would of been almost a £9K loss

And there lies the problem - used cars do not reflect having bought at full list price - it is assumed that a discount will have been given and pricing is calculated accordingly.

I get the feeling this is a distractor for some other underlying issue as the Stealer uses brokers to offload cars & hit targets and get better prices. Is it not a little incestuous?

silverbmwz3 · 09-08-2007, 02:56 PM

Maybe they'll change the incentive scheme for dealerships and perhaps ban them from selling to brokers somehow. The discounts weren't there at this level in the past afaik so something changed...maybe they'll change it back!

Z4 Beemer · 09-08-2007, 03:19 PM

I think you are right Silver - something has changed within the last 2 years or so? Hopefully they will sort things out, as the status of a BMW as being a slow depreciating car is not apparent at the moment!

hmi1750 · 09-08-2007, 05:37 PM

Since the 3 became very popular with fleet sales, it has lost its exclusivity. Generally though Audi and Mercs are also struggling to sell without good discouts or broker use.

red355 · 09-09-2007, 02:30 AM

Quote:

Originally Posted by silverbmwz3

Maybe they'll change the incentive scheme for dealerships and perhaps ban them from selling to brokers somehow. The discounts weren't there at this level in the past afaik so something changed...maybe they'll change it back!

In some cases the dealerships ARE the brokers. Broadspeed & autobytel are an internet presence / front for Coopers

Nohedes · 09-09-2007, 06:25 AM

You can see this guy's point. His current business model is like this:

BMW price car at £35k
Dealer sells car to broker for £28k
Broker sells car to customer for £30k
BMW get cr@p margin and worsening resale position!

Resale is bad for private sales, but even worse for company and fleet sales as higher depreciation levels lead to higher lease prices and lower sales. You just have to look at the lease prices for a BMW 5-series compared to say a Citroen C6 - both c£40k cars, but the 535d is £150pm cheaper to lease!

Mike UK · 09-09-2007, 07:53 PM

TBH, don't know how this will affect sales as Mercedes-Benz has removed their independent dealers haven't they?! But discounts can still be found on their cars from main dealers.

CokerRat · 09-09-2007, 08:41 PM

Curious why a given BMW dealership would sell to a broker for 28K when when could sell to the end-customer for 30K directly, or perhaps more. Is the issue that BMW doesn't have the proper number of salespeople to complete those sales?

creepy coupe · 09-10-2007, 03:18 AM

Quote:

Originally Posted by mikem

What he doesn`t say is that in order to have a slow depreciating BMW, you have to buy with the biggest discount possible. I lost £4.5K on my 325d M sport in 12 mths and 12K miles (Which in my opinion is perfectly acceptable for a brand new car). However if I`d paid full list price it would of been almost a £9K loss

Exactly, I save £4k on mine,(BMW Dealer) which is about the same as the VAT, without that saving, I wouldn't be owning one.

09-08-2007, 03:38 AM	#1
BC4J Captain 58 Rep 793 Posts Drives: F30 328i Join Date: Apr 2007 Location: Berkshire iTrader: (0) Garage List 2007 E90 335d [0.00]	If You're Thinking of Buying New, Buy NOW! ..for the end is nigh, if the BMW UK MD is to be believed. From this morning's Torygraph: "BMW puts online brokers on the line. Discounted BMWs will be a thing of the past if BMW UK MD Jim O'Donnell has his way. He has declared war on brokers who buy cut-price new cars from his dealers and sell them to the public through the internet. He claims the practice is caused by the dealers trying to meet sales targets that trigger incentive payments. This week internet brokers were offering new BMW models at between £1,000 and £8,000 off the list price. O'Donnell claims this discounting undermines the entire BMW dealer network and the status of BMW as a slow-depreciating car. "We don't want our dealers to feel under such pressure that they sell to brokers at low cost to meet their targets," says O'Donnell, who readily admits that his organisation is to blame for the situation."" __________________ Behold! F30 328i M-Sport - Tanzanite Blue with Opal White Leather
	Appreciate 0 Tweet Quote

09-08-2007, 03:47 AM	#2
mikem Lieutenant Colonel 83 Rep 1,557 Posts Drives: Z4M Join Date: Oct 2006 Location: Somewhere iTrader: (0)	What he doesn`t say is that in order to have a slow depreciating BMW, you have to buy with the biggest discount possible. I lost £4.5K on my 325d M sport in 12 mths and 12K miles (Which in my opinion is perfectly acceptable for a brand new car). However if I`d paid full list price it would of been almost a £9K loss
	Appreciate 0 Quote

09-08-2007, 02:56 PM	#4
silverbmwz3 Colonel 48 Rep 2,022 Posts Drives: X5 g05 Join Date: Mar 2007 Location: Buckinghamshire, UK iTrader: (0) Garage List 2003 325 ci SE conv ... [0.00]	Maybe they'll change the incentive scheme for dealerships and perhaps ban them from selling to brokers somehow. The discounts weren't there at this level in the past afaik so something changed...maybe they'll change it back! __________________ Current: E90 335d (May 2007) \| Black/Black \| Prof Hifi \| Prof Nav \| 6FL \| Fully Electric Seats \| Xenons \| Folding Mirrors \| PDC Previous: 325ci Conv. Black/Black with lots of ACS Previous: z3 3.0 Silver with Black&Red Leather
	Appreciate 0 Quote

09-08-2007, 03:19 PM	#5
Z4 Beemer Colonel 84 Rep 2,353 Posts Drives: 2009 Z4 sDrive 23i Join Date: Oct 2005 Location: Glasgow, Scotland, UK iTrader: (0) Garage List 2006 E92 [0.00] 2004 Z4 2.2i [8.00]	I think you are right Silver - something has changed within the last 2 years or so? Hopefully they will sort things out, as the status of a BMW as being a slow depreciating car is not apparent at the moment! __________________ E89 Z4 sDrive 23i... for the more discerning driver
	Appreciate 0 Quote

09-08-2007, 05:37 PM	#6
hmi1750 Major 25 Rep 1,130 Posts Drives: M135i Join Date: Jun 2007 Location: London, UK iTrader: (0)	Since the 3 became very popular with fleet sales, it has lost its exclusivity. Generally though Audi and Mercs are also struggling to sell without good discouts or broker use.
	Appreciate 0 Quote

09-09-2007, 06:25 AM	#8
Nohedes Private First Class 4 Rep 102 Posts Drives: E92 330d M-Sport (2008) Join Date: Aug 2007 Location: UK iTrader: (0)	You can see this guy's point. His current business model is like this: BMW price car at £35k Dealer sells car to broker for £28k Broker sells car to customer for £30k BMW get cr@p margin and worsening resale position! Resale is bad for private sales, but even worse for company and fleet sales as higher depreciation levels lead to higher lease prices and lower sales. You just have to look at the lease prices for a BMW 5-series compared to say a Citroen C6 - both c£40k cars, but the 535d is £150pm cheaper to lease!
	Appreciate 0 Quote

09-09-2007, 07:53 PM	#9
Mike UK Private First Class 7 Rep 196 Posts Drives: Le mans Blau e92 Join Date: Apr 2006 Location: UK iTrader: (0)	TBH, don't know how this will affect sales as Mercedes-Benz has removed their independent dealers haven't they?! But discounts can still be found on their cars from main dealers.
	Appreciate 0 Quote

09-09-2007, 08:41 PM	#10
CokerRat Private 3 Rep 96 Posts Drives: 2015 F10 535i xDrive Join Date: Dec 2006 Location: Canada iTrader: (0)	Curious why a given BMW dealership would sell to a broker for 28K when when could sell to the end-customer for 30K directly, or perhaps more. Is the issue that BMW doesn't have the proper number of salespeople to complete those sales?
	Appreciate 0 Quote