Last week, we reported that over 300 BMWs have been damaged during shipping. Most of the cars were the upcoming BMW 1-series and the new M3, and to twist the knife even harder, lots of the damaged cars belonged to customers who have bought their lovely bimmers through the BMW European Delivery Program.
Unfortunately, this was not the first time that happened. In the past, it was the Andrea Doria and the Chrysler Norseman concept car. Then there was the Tricolor, a Wallenius Lines vessel that sank in the English Channel, taking down over 2,000 Volvos, BMWs and Saabs. Later there was the infamous Cougar Ace, which heeled over on its side and took 4,700 Mazdas with it. It seems like these type of things are bound to happen once in a while and then it's normal for everyone to wonder how would the car manufacturers deal with this.
BMW says customers concerned about ending up with a damaged car can rest assured that any and all damage will fully disclosed before being sold to dealers. Following its long-standing policy, the damaged vehicles will be handled appropriately based on the degree of damage incurred. For instance, any vehicle whose repair costs approach or exceed its inventory value will be crushed in whole at the port.
Vehicles with damage greater than three percent of their value will be repaired and used as employee vehicles for a period of time before being sold at dealer auctions with full disclosure of the damage and repairs. After being sold at auction, the cars will carry the balance of the original factory warranty.
Cars with less than three percent damage will be repaired, after which the dealer, or the customer in the case of a special order vehicle, will be notified of the damage and repair and then given the option of accepting or refusing the car. Any repaired car that is rejected by either a dealer or a customer will be sent to a dealer auction and the vehicle will be replaced with an identical one at the earliest possible time. All repaired vehicles will carry the full factory warranty.
And here is the important part for all of you that have done the ED program: Those customers who were waiting for their European Delivery vehicle to arrive will have the same options and everyone else. Essentially, they can take a similar vehicle from dealer stock, or they can order an identical replacement new from the factory.
Unfortunately, in my opinion all these problems will set back the launch of the new models and will impact the dealers as well.