The coronavirus pandemic followed by the microchip shortage created the perfect storm in the automotive industry. Some automakers fared better than others in these challenging times, and the BMW Group shined in the luxury segment. 2021 was an all-time record year for the German conglomerate, but 2022 is off to a slow start as demand at the core brand in the first quarter went down by 7.3%.
However, it wasn’t all bad as against all odds, the US branch enjoyed a 3.2% boost in deliveries compared to the January-March 2021 interval. How was it all possible? Dealers are praising BMW for giving them exactly the cars that were in hot demand. According to San Antonio-based Principle Auto’s president Mark Smith, the car manufacturer is “doing a tremendous job to get cars to us any which way they can.”
Smit manages two stores and mentions BMW has a clear approach when it comes to tackling the supply bottlenecks. How? By having a “we’re not going to let it whip us” attitude. His sentiments were echoed by David Sloane, chairman of BMW National Dealer Forum. He said constant communication between dealers and factory “made the difference.”
Communication Is Key
Sloane explained BMW management has done a terrific job at keeping in touch with dealers about near-term production plans. They’ve also been informed about inventory levels, even before cars reached the dealer lots.
“Having that information allows us to accurately tell customers when a car is coming and confidently sell into the pipeline. If we don’t know far enough out what product is coming and when, it’s much harder for us to presell those cars.”
In the first quarter of 2022, BMW USA delivered 73,714 cars, beating Lexus (64,365), Mercedes-Benz (62,251), and Audi (35,505). Provided you consider Tesla to be a luxury brand, Elon Musk’s company took the number one spot with 110,000 deliveries. However, it’s not an exact number since it represents an estimation made by Automotive News.
Microchip shortages are unlikely to go away anytime soon. In fact, BMW CEO Oliver Zipse told newspaper Neue Zuercher Zeitung the lack of semiconductors will drag on until later in 2023.