In the beginning of August, BMW reported selling 21,297 vehicles in July in the United States – a considerable 1,986 more cars than the rivaling Mercedes-Benz brand. According to sales figures, the 7-Series luxury saloon accounts for 1,696 of them.
So what, you might ask; BMWs are upmarket cars and there are certainly enough people in the US willing to cash up for a 7-Series, which is a very competent car indeed.
The problem is that the exact same model managed only 539 sales in June. A 300 percent increase in a single month is extraordinary and, according to The Wall Street Journal, there is a simple, but ethically questionable, explanation.
On July 31, one day before companies were to report their sales figures, BMW offered its dealers heavy discounts, which started from US$2,500 for a 528i rising to US$7,000 for a 7-Series. Nothing wrong with that, either.
Except for the fact that, as the WSJ claims, these discounts were available on 2012 cars and dealers that reported those vehicles as sold on that day alone. As a result, hundreds of cars that were registered as sold are still sitting outside dealerships, probably with an “as new” sticker on the windshield, waiting for a new owner.
BMW North America spokesperson Kenn Sparks said that the company’s July sales figures include demo vehicles, which are used for test drives by potential customers. “These vehicles may stay on the lot because they are used as demo models”, he explained, though he wouldn’t disclose an exact figure, as the company does not release this kind of information to the public.
Sparks’ counterpart at Mercedes-Benz, Geoff Day, had no problem revealing his company’s numbers. He said the company had included in its U.S. monthly sales reports about 500 cars that were shipped to dealers as demonstrator models in June and July.
In the first seven months of 2012, BMW trails Mercedes-Benz by a mere 111 units, having recorded 147,801 sales against its archrival’s 147,912 (excluding the Sprinter van). Therefore, this will be a very close-fought battle for the top spot until the end of the year.
According to the business daily, several managers at BMW dealerships said they had no customers who bought or leased the demo cars, but reported them as sold to “lock in” the discounts. “If I don’t take them, then I’ll be at a disadvantage to my competitors”, said a dealer executive.
Others, though, denied that the company implemented the practice in order to “doctor” the sales figures. They said that the company is doing very well and only offered incentives on 2012 model-year cars to make room for the 2013 vehicles.
“If you don’t sell the cars in North America, they’re going to send them to China“, Justin Wong, a California-based Internet salesman claimed. “Everybody is fighting for allocation.”
PHOTO GALLERY
