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BMW takes away 44,000 cars from the U.S allocation

News | September 22nd, 2008 by 3

Not very good news for the people in the U.S.,  BMW will take away 44,000 vehicles from the U.S allocation, in a move that is …

Not very good news for the people in the U.S.,  BMW will take away 44,000 vehicles from the U.S allocation, in a move that is supposed to maximize sales volume and create more revenue. Back in August, BMW announced they plan to return to a pull-oriented sale strategy versus the push, which could be automatically associated with higher prices, no subsidized lease rates and less incentives.

In the same press release, Jim O’Donnell, CEO of BMW (U.S.) Holding Corp announced the reduction of 90 corporate jobs, with the same goal: reducing costs.

But here is an excerpt from his statement, along with the full article on Autonews.

BMW’s new North American chief wants to stop pushing for maximum sales volume in a declining market — even if it means bringing 16 years of U.S. sales increases to a halt.

BMW Group’s U.S. operations will not take 44,000 new BMW brand cars and trucks that were to be allocated to the United States this year, said Jim O’Donnell, CEO of BMW (U.S.) Holding Corp. Those vehicles will go to markets where they can be sold more profitably, he said.

The smaller sales target is part of a bigger rethinking of U.S. strategy that O’Donnell will present to his German bosses in January. That plan could include the reintroduction of four-cylinder powertrains, O’Donnell said. Currently, the smallest powerplant in the BMW brand’s U.S. lineup is a six-cylinder engine.

In an interview last week, O’Donnell said he will:

— Cut lease volume at least 10 percentage points.

— Reduce incentive spending and end the traditional December blowout.

— Change dealer bonuses to boost customer satisfaction.

— Cut corporate costs. O’Donnell says he will eliminate 90 North American jobs.

“We want to see how the market is going and will revisit our aspirations in January,” said O’Donnell, 58. The Scot, who took the helm at BMW in April, has long been familiar with the United States (see story, Page 38).

“When you have had 16 years of growth, you do not necessarily look too closely at what you are doing and how much you are spending,” O’Donnell said. “I need that fresh look at the organization.”

[Source: Autonews ]

  • Marc

    This is good news for the people who buy 2009 BMW’s (like me)… we might pay a little more, but our resale value should improve do to less market saturation. Owning a BMW might have a bit more exclusivity, also a good thing!

  • Mike D

    Has there been any mention of how this reduction in allocation will be spread among the various models? Are there certain models that will be impacted more than others?

    Marc … I agree this won’t be a bad thing.

  • http://www.bmwblog.com Horatiu B.

    @Marc: True, but the prices and rates will be way higher than we have now, I can already see my car being leased for at least $80-$100/month more.

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