At the recent BMW X3 launch in Spartanburg, BMW announced a $5 million allowance for its marketing budget for the new X3 to encourage customers to order the exact vehicle they want instead of buying an already-built model from a dealer’s lot.
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The marketing effort will include TV commercials, print ads and an increased presence on the Internet. To make the process even more fun for its customers, BMW installed cameras along the production lines and the owners can watch their cars being built via the internet.
Custom orders are quite popular in Europe where about half of all BMWs are spec’d up before being delivered to the buyer. Some of these deliveries take place at the local dealership or for an extra-fee for European customers, at the BMW Welt in Munich.
BMW wants its U.S. dealers on board to help promote options on built-to-order models. Built-to-order vehicles, which can help manufacturers keep inventories lower and aren’t discounted as much, are rare in the United States.
BMW North America Inc. CEO Jim O’Donnell told AutoObserver in an interview in Spartanburg that the X3 build-to-order plan is very much an experiment, one that BMW said earlier this year it was anxious to begin. He admits that that even some of his German counterparts at BMW doubt build to order will work – Americans won’t wait for a car to be built, they insist.
“I have no idea how successful build to order is going to be for the X3,” he admitted. “But I’m optimistic.”
O’Donnell’s target sales are 70 percent of all X3 sales to be build-to-order sales.
The X5 recent sales showed 85 percent of the popular SAV were being pre-ordered by customers, up from 20 percent in 2009.
O’Donnell says customers who order their vehicles tend to load them up with equipment, which pushes up transaction prices – and thus profit margins – on the sale. In addition, a vehicle doesn’t sit on a dealer’s lot where it has to weather the elements, be maintained and upon which a dealer has to pay financing interest. That’s data BMW will use to convince possibly reluctant dealers to shift their behavior.
To alienate some of the concerns, BMW also mentioned that customers can change their orders up to six days before the vehicle enters production.
To build an even stronger case for build-to-order schema, BMW is also offering exclusive options, three colors and two leather choices.
BMW Performance Center will continue to play an important role in the delivery of cars. Customer can still opt to pick up their car in Spartanburg, receive a one hotel night paid by BMW and enjoying a full day on a race track and off-road course at the Performance Center facility. More on this in our upcoming article taking delivery of a BMW 128i Convertible.
[Source: AutoObserver ]