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      11-03-2021, 06:29 AM   #1
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BMW Group Q3 earnings surge. Semiconductor update from CEO

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     Featured on BIMMERPOST.com
Via Bloomberg

BMW earnings surge on improved pricing for new, used cars

Group earnings before tax jumps 50% to $3.36B in the third quarter

BMW Group reported a jump in third-quarter earnings after higher vehicle prices and prioritizing its biggest money-spinning models helped the company offset output reductions due to the microchip shortage.

Group earnings before tax surged 50 percent to 2.9 billion euros ($3.36 billion), BMW said Wednesday, compared with an average analysts' estimate of 2.5 billion euros.

The chip supply woes that have hampered the entire industry will remain an issue beyond this year, it said.

"Business during the current financial year to date has benefited substantially from the favorable stable market situation and continued brisk demand," CFO Nicolas Peter said in the statement.

BMW has navigated turmoil from the chip shortage better than others, and in late September went against the tide of warnings to raise profit expectations.

While automakers have been able to offset much of the crisis with higher prices and swinging output toward their most lucrative models, suppliers such as Continental have been less fortunate.

BMW's deliveries during the third quarter sagged about 12 percent to just under 600,000 cars compared with a year ago, when pandemic restrictions still kept buyers away from showrooms. Mercedes-Benz sales plunged 30 percent during the same period.

After semiconductor availability grew worse during the third quarter, manufacturers are seeing light at the end of the tunnel. Last week, Volkswagen Group and Stellantis, the two biggest automakers in Europe, said the crunch should finally start to ease.

As traditional manufacturers' rollouts for electric vehicles gather pace, they are struggling to dent Tesla's rise.

The EV leader's valuation rose above $1 trillion for the first time last week, swept higher by a deal to supply 100,000 cars to rental company Hertz Global Holdings.

Tesla's Model 3 also took the top spot for European car deliveries during September, the first electric car to do so.

BMW expects full-year earnings before interest and taxes on automaking of between 9.5 percent and 10.5 percent on sales, up from a prior outlook of 7 percent to 9 percent.



________________________________




The quarterly update from the BMW AG Board.

First up, Oliver Zipse:

Quote:
Statement Oliver Zipse, Chairman of the Board of Management of BMW AG, Conference Call Quarterly Statement to 30 September 2021

A very warm welcome to all of you!

The BMW Group is profitable and the company is growing. This is thanks to our customers around the world as well as the strong demand for our diverse range of products and drivetrain technologies.

We delivered 1.9 million BMW, MINI and Rolls-Royce vehicles to customers in the first nine months of the year as well as 156,000 BMW motorcycles and scooters. This represents an increase of 18 and 21 percent respectively above the previous year. BMW once again gained market share and captured 3.4 percent of the global market as a premium manufacturer.We were also able to expand our strong competitive position in key markets, such as the US and China. BMW leads the premium segment in numerous countries. In addition to China and the US, this is also the case in Mexico, Brazil and other markets in South America, as well as South Africa and several European countries, including our domestic market of Germany.

This shows that: We are maintaining our successful business development.
And we can therefore confirm our adjusted guidance for 2021. Our profitability is of extreme importance. In this way, we are laying the foundation for continued investment in relevant future areas of activity. This ambidexterity is needed now more than ever. Just think about the ambitious political guidelines, diversified economic and social developments around the world, new technological possibilities and geopolitical tensions, and many other examples.

As a global company, we have a responsibility to ensure the BMW Group’s business model is viable in the long term under all possible conditions. On the one hand, this means we have to approach short-term changes in our environment with flexibility, but also with consistency. At the same time, we continue to follow our strategic direction in line with our long-term goals and are making the necessary decisions.

I would like to discuss these two perspectives in more detail today:

What are we focused on right now?
And how are we setting ourselves up for the years after 2025?


Directly to the first point:

This year, we demonstrated once again that we are capable of overcoming difficult situations: This applies equally to the lingering effects of the coronavirus pandemic, as well as to the current situation with semiconductor supplies. Our Divisions Purchasing, Development and Production as well as Sales and Marketing are working together very closely on this and exhausting all possibilities. Our stable and trustful relationships with suppliers worldwide also mean that we have been able to cushion the impact for our customers better than many of our competitors.

Not only all our brands, but also all major regions of the world saw significant growth until September: Europe: more than 10 percent. Asia: almost 20 percent. The Americas: over 30 percent. Other markets grew by almost 30 percent.

As expected, and as previously announced, the sales momentum for our electrified vehicles is particularly strong: Our deliveries of electric vehicles and plug-in hybrids doubled between January and September, compared to the previous year. Our BEV sales were even 120 percent higher year-on-year.

Our new innovation flagships, the BMW i4 and BMW iX, have recently begun rolling off the production line. Both are pre-ordered several months out. Many members of the media and car experts from around the world have already experienced the i4 and the iX for themselves and they were thrilled.

We on the Board of Management get to test our products on a regular basis, of course. But recently, our senior managers had the same opportunity. They drove almost 600 km in the iX, from Munich to just outside Cologne – fully electric and with all the latest digital features. Their conclusion: E-mobility has fully arrived in our everyday lives.

However, the charging infrastructure isn't keeping up. Here in Germany and all across Europe, it needs to be expanded swiftly and noticeably – while also being binding and ambitious. I am also advocating for this as ACEA president. The growth of electric cars already exceeds the growth of current charging capacity in Germany by factor of five. Many EU countries still don’t have a charging network at all. Without a coherent framework, no technology can be implemented or become widely accepted. This applies to both e-mobility and hydrogen. That is why the next steps towards tighter CO2 reductions in Europe after 2030 should only be decided based on the charging infrastructure that has actually been built by then. A review in 2028 can then define the right specifications for the rest of the journey.

A fundamental requirement is that our customers are already enthusiastic about e-drives today. And we can state that we are on the right track here. To quote a recent headline: “The best 4 Series is electric” – the new BMW i4 is getting a lot of praise like this. This is how we create desirability. We are building the new i4 at our oldest plant – where people of more than 50 nationalities work together, right in the heart of the city.

Please allow me a brief digression – because this is where the change is most visible: We are gradually relocating our engine production to other sites – without cutting jobs. Instead, an assembly plant for electric cars is being built on the same site. That gets us moving quickly: By 2023, at least half of all vehicles from Plant Munich will have an electrified drive train – the overwhelming majority of them fully electric. With its new vehicle assembly, the plant will also be able to produce up to 100 percent BEVs from 2026 onwards. This will be determined entirely by demand. That is how systematic transformation works. At the same time, we are also working on emission-free transport logistics for our main plant.

No one will get left behind. We have already trained more than 50,000 specialists worldwide for e-mobility. Starting this month, the i4 and iX will also be available alongside our electric pioneer, the BMW i3; our successful urban model, the MINI SE*; and the BMW iX3*, which is built in China. Over the next two years, these will be joined by fully electric versions of the high-volume BMW 5 Series and X1, as well as the 7 Series.

What does this mean for our customers?

By 2023, we will have at least one fully electric model in about 90 percent of our current market segments – giving our customers the ability to choose. Nevertheless, we still have a long way to go until all customers in all countries around the world are able to rely solely on electric driving. But, when it comes to climate protection, every single gram of CO2 that we can avoid today counts. Why should we commit to a single technical solution early in the process, when that means leaving considerable potential untapped in the here and now?

This explicitly includes further CO2 reductions through the use of state-of-the-art conventional drive technologies. From 2022 onwards, our modular motors will receive second generation 48-volt technology.

This leads to a further significant increase in efficiency. For some models that now jump straight into the second stage, this can result in less CO2 of up to 20 percent. We need competition between technologies – in the interest of customers and for less CO2. Anything else would put us on a consolidation course. Our intelligent vehicle architectures will allow us to continue to offer markets worldwide the right technologies for their individual circumstances and pace of change.

Let’s move on to my second point:

How are we setting ourselves up for the years after 2025?


We see technological change as a tremendous opportunity to strengthen our business model for the long term. Technology can protect the climate. We are systematically gearing the BMW Group towards climate neutrality. What does that include?

First:

Continuing to ramp up e-mobility for all our brands. MINI and Rolls-Royce will be exclusively all-electric from the early 2030s. We will be taking our core BMW brand into a new fully electric dimension with the NEUE KLASSE from 2025 onwards. The same applies to the digital experience of mobility for our customers.

Second:
Our strong commitment to climate-neutral mobility. To achieve this, we have again tightened our ambitious sustainability goals for the supply chain, production and the use phase.

And thirdly:
Our focus on the circular economy. We showed what this looks like in practice at the IAA Mobility:
We have received extremely positive feedback worldwide on the BMW i Vision Circular. It is made of 100-percent recycled material and is itself 100-percent recyclable. We don’t just make announcements; we let our actions speak for themselves. For the NEUE KLASSE, for example, we are sourcing “green” steel – manufactured using hydrogen and green power – from Swedish start up H2 Green Steel. In this way, we can drastically reduce CO2 emissions starting at the very beginning of the supply chain.

The real question, after all, is: What is a vehicle’s overall carbon footprint throughout its lifecycle – from the use of raw materials, through industrial manufacturing and active use, all the way to recycling?

The credibility of this is measured by whether concrete action can be verified at the end. That is why the BMW Group became the first German automotive manufacturer to join the Business Ambition for 1.5 degrees. This entails a commitment to climate neutrality by 2050.

Our path to achieving this is scientifically validated, transparent and measurable. It is absolutely clear: Resources are becoming increasingly scarce – and, as a result, prices for raw materials are rising. That is why we are already thinking about the next logical step in the transformation: how to significantly reduce our resource consumption. This will be a crucial lever to achieving sustainable development and profitable growth in the future.

The BMW Group will gradually increase the percentage of secondary material it uses in its vehicles to 50 percent. This is a challenge for all of us. That is why we can no longer think in a fragmented way. In light of the ongoing UN Climate Change Conference in Glasgow, I will address these issues at the COP's Sustainable Innovation Forum next Monday. Our shared goal of lowering CO2 emissions quickly and on a massive scale demands cooperation at the global level. This applies specifically to CO2 pricing.
We support pricing as the most efficient measure to curb carbon emissions – provided it is regulated across national borders and in a uniform manner. It is very important that the steering effect of policy is aimed in this direction.

In all sectors, sustainability and digitisation have long been closely linked. That is precisely why we have established the industrial flagship project Catena-X – which we now seek to strengthen further.

Catena-X creates transparency, from small suppliers to OEMs. This cross-sectoral connectivity is a real advantage for Europe as a manufacturing location. Today’s modern vehicles are already shaped largely by software. With research and development activities at 10 locations worldwide – our own and, also, at our joint ventures – we have a total of around 10,000 IT and software specialists working on digitisation of vehicles. We have been moving forward with connectivity in our vehicles for more than two decades. And we are seeing this again right now:

By the end of this year, the BMW Group will have the world's largest fleet of vehicles on the road with “over-the-air” update and upgrade capabilities. With Remote Software Upgrade, our vehicles always have the very latest technology – just like the updates we are all used to on our smartphones.

This benefits our customers directly: Their vehicle is not only always up to date; it also keeps on getting better because we can access every line of programming code in the vehicle. Our customers can also purchase or subscribe to new functions and features. With high-end connectivity, such as 5G in the iX, our vehicles are transformed into a smart device within the customer’s own digital ecosystem.

Standardisation is key to the digitisation of cars.

We believe it makes sense to develop common, standardised basic elements for vehicle operating systems in conjunction with other OEMs and suppliers. The use of open-source software is highly relevant in this respect – to make sure we are all speaking the same language. There is no need to reinvent the wheel. We can ensure a high level of economic efficiency and, at the same time, make use of existing digital ecosystems, such as Google’s Android Open-Source Project.

In this process, we are working with tech players like Apple, Amazon, Tencent, Google and Intel – while still competing with them. I see this less as a clash between OEMs and tech giants, and more as an expression of the market reality in the digital age and a way to guarantee further progress.

Ladies and Gentlemen,

In a multi-layered transformation process, employees are a meaningful seismograph that provides a valuable indication of the state of a company.
We received over 100,000 responses to our Employee Survey in October – the highest ever. And the results show a very positive trend in all categories compared to the surveys in 2017 and 2019. They showed that the vast majority of our global team are confident about the future of the BMW Group – across all divisions and hierarchy levels.

This spirit and optimism demonstrate to me that:

Our team really sees the transformation as an opportunity.
We have the right balance of disruption and stability.
We consistently combine change and responsibility.

We are finding solutions and moving fast – and taking our people along with us. This is how the BMW Group will remain on course for long-term success – by being profitable, innovative and responsible. Thank you!
Source: https://www.press.bmwgroup.com/globa...call-quarterly
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      11-03-2021, 06:32 AM   #2
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And the statement from Dr Nicolas Peter, Member of the Board of Management of BMW AG, Finance.

Quote:
Good Morning, Ladies and Gentlemen.

The BMW Group’s positive business development in the first nine months of the year confirms our strategic course.

Throughout the semiconductor crisis, our employees have delivered outstanding performance, month after month. That is how we were able to raise our expected targets for the year again in September.

All segments are on track to meet our guidance for the year. We continue to focus on gearing the BMW Group towards emission-free mobility – funding the investments needed from our ongoing business.

We will keep our Performance Programme going, with a main focus on the consistent exploitation of market potential.

Moreover, we are picking up the pace in the digitalisation of processes across the entire company. And we will continue to work consistently on the optimisation of our working capital, in particular on our logistics.

Let's start with the financial figures for the Group.

Group revenues for the first three quarters of 2021 climbed by 19.2% to 82.83 billion euros. Third-quarter revenues increased to 27.47 billion euros.

As expected, Group earnings before tax for the year to the end of September were significantly higher than the previous year, at 13.15 billion euros. The figure for the third quarter was 3.42 billion euros. The Group EBT margin for the year to the end of September was 15.9%; in the third quarter, it was 12.4%.

We therefore can be confident that we will not only achieve significantly higher Group earnings for the year, as previously announced, but also surpass our long-term target of at least 10% for Group EBT margin.

After a strong first half-year, third-quarter vehicle sales were, as expected, lower than the prior-year quarter – due in part to the ongoing semiconductor supply bottlenecks.

Strong customer demand is reflected in continuing positive pricing effects, while the model mix has also continued to improve.


Sustained high prices on international preowned car markets also resulted in very favourable income levels from the resale of end-of-lease vehicles in the third quarter. This has enabled us to more than offset the decrease in volumes.

Ladies and Gentlemen,

With the market launch of the two all-electric iX and i4 models in November, we reached another major milestone. New orders for both vehicles are very strong.

We continue to push forward with the electrification of our entire model range, as planned. As previously announced, we are also making further investments in digitisation.

This will be a particular focus for us this year and in 2022, with respect to both our vehicles and our processes.

By the end of the year, the BMW Group will have the largest fleet capable of over-the-air upgrades among the competition with around 2.5 million vehicles.

Also as previously announced, research and development spending for the third quarter was up almost 200 million euros on the previous year, at 1.6 billion euros. This was also higher than the preceding quarters.

The R&D ratio increased to 6.5% for the quarter and 5.3% for the first nine months of the year. We continue to expect the R&D ratio for the full year to be on a par with the previous year, at about 6%.

At around 950 million euros, capital expenditure is also higher than the previous year’s quarter, as planned. This represents a capex ratio of 3.5% for the third quarter and 3.2% for the year to the end of September. We still expect the ratio for the full year to be well below our target figure of 5%.

Through the overall positive market development, the BBA result in the financial result continued to improve in the third quarter.

Ladies and Gentlemen,

Let's move on to the individual segments, starting with the Automotive Segment.

As expected, semiconductor supply bottlenecks slowed down sales in the third quarter. However, thanks to our ability to respond quickly and the high level of flexibility in our global production system, we were able to limit the impact on vehicle manufacturing.

In line with strong customer demand, revenues increased to more than 70 billion euros in the year to the end of September. Third-quarter revenues totalled 22.63 billion euros, around 3% more than the previous year.

The segment also achieved a new all-time high, with an EBIT of 7.95 billion euros at the end of September. Despite the decrease in volumes due to the supply bottlenecks, EBIT for the third quarter rose by nearly 19% to 1.76 billion euros.

This represents an EBIT margin of 11.3% for the year to the end of September and 7.8% for the quarter.

As expected, the earnings momentum weakened at the start of the second half of the year, compared with the first half-year.

In addition to the semiconductor issues, increased raw material prices and higher fixed costs due to the growth in research and development spending also had an impact on earnings. However, this was offset by positive pricing effects resulting from supply shortages and the positive trend in residual values.

This development is also reflected in the contribution of our Chinese joint venture, BBA, to the financial result. The total third-quarter at-equity result was 35 million euros higher than the previous year.

The strong earnings momentum and consistent ongoing management of inventory levels are also evident in the segment’s free cash flow.

At the end of September, free cash flow totalled almost 6.3 billion euros – despite higher capital expenditure, scheduled cash outflows for personnel restructuring measures and payment of the fine imposed by the European Commission in connection with its antitrust proceedings.

This means we are on course to meet our upwardly adjusted target for 2021 of around 6.5 billion euros.

We anticipate a further increase in capital expenditure in the fourth quarter, as well as significantly higher advance tax payments. Due to the supply bottlenecks I mentioned, earnings development will also weaken slightly compared to the first nine months of the year.

The Financial Services Segment once again delivered a strong performance. More than 1.5 million new financing and leasing contracts were concluded with retail customers in the year to the end of September. This means the number of new contracts is also higher than in 2019, before the pandemic.

Between January and September, segment earnings before tax climbed by nearly 1.9 billion euros to more than 2.9 billion euros.

The figure for the third quarter increased to 988 million euros.

A key factor in this development remains the exceptionally positive trend in preowned vehicle markets worldwide – leading to higher income from the resale of end-of-lease vehicles. Expenses for credit risks also remain low. In the prior year, we adjusted risk provisioning for the pandemic – which had a dampening effect on segment earnings.

The Motorcycles Segment also performed well in the first nine months of the year. More than 156,000 motorcycles were delivered to customers in the year to the end of September – a fifth more than in the same period of 2020.

The segment’s operating earnings almost tripled to 323 million euros. The figure for the third quarter was 39 million euros. This represents an EBIT margin of 14.3% for the first nine months and 6.1% for the quarter.

Ladies and Gentlemen,

Let's move on now to the outlook for our key financial and non-financial performance indicators.

We expect to see a significant increase in Group pre-tax earnings for the full year.

The number of employees is projected to be slightly lower than last year.

In the Automotive Segment, we are forecasting a solid increase in the number of vehicles delivered to customers, compared to the previous year.

Electrified vehicles will account for a significantly higher percentage of total volumes. By the end of September, we had already sold more than twice as many battery-electric vehicles than in the previous year.

We will once again significantly reduce the CO₂ emissions of our new vehicle fleet.

However, the current uncertainty over semiconductor supplies will continue to disrupt production in the fourth quarter. As previously announced, high raw material prices and the increase in fixed costs towards the end of the year will also impact earnings.

We expect the EBIT margin in the Automotive Segment to be within the range of 9.5 to 10.5%, as previously communicated.

The main reason for the positive adjustment of our guidance in September was continued positive pricing – for both new and preowned vehicles.

In the Financial Services Segment, we expect a return on equity of between 20 and 23%, in line with strong business development and the positive residual value and credit risk situation.

In the Motorcycles Segment, we anticipate a significant increase in deliveries. The EBIT margin will remain within our target range of 8 to 10%.

Our guidance assumes that political and economic conditions will not deteriorate significantly.

Ladies and Gentlemen,

As previously announced, we expect a stable earnings development in the fourth quarter. Customer demand will remain strong.

However, the semiconductor supply bottlenecks will still be the main influencing factor.

Our strong performance in the first nine months of the year once again proves our operating strength. At the same time, we continue to focus on the further technological development of our products.

That is why we will enter the new year with full confidence.

Thank you.
Source: https://www.press.bmwgroup.com/globa...onference-call
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      11-03-2021, 04:11 PM   #3
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Because people still buying 2022 X7 with less options as my 2018 X5 ... lol

They just dropped the touch screen on some cars including the X7 but people still shopping like crazy. Nobody will want this vehicles in couple of years.
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      11-03-2021, 04:51 PM   #4
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Originally Posted by LOW4LYF View Post
Because people still buying 2022 X7 with less options as my 2018 X5 ... lol

They just dropped the touch screen on some cars including the X7 but people still shopping like crazy. Nobody will want this vehicles in couple of years.
Debbie-downer, sheesh.
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      11-03-2021, 04:59 PM   #5
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Quote:
Originally Posted by jmack123 View Post
Quote:
Originally Posted by LOW4LYF View Post
Because people still buying 2022 X7 with less options as my 2018 X5 ... lol

They just dropped the touch screen on some cars including the X7 but people still shopping like crazy. Nobody will want this vehicles in couple of years.
Debbie-downer, sheesh.
He's not wrong tho. Nothing Debbie downer about it. Just saying they're slashing features but people are still putting in orders. I would not buy a x7 without basic things like touch screens but I'm not gonna stop people lol
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      11-03-2021, 05:16 PM   #6
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The days of 10pc+ off MSRP and cheap lease deals are probably over in the short/med term, they have tasted slightly lower volume on a much higher margin.
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      11-03-2021, 05:39 PM   #7
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Originally Posted by jmack123 View Post
Debbie-downer, sheesh.

How old are you my son?

BMW is removing options almost on a weekly basis but only giving a super small credit for missing options if they even do! On top every new X in California has 30K on top by the dealership as market adjustment!

So this made me to buy a used F85 insted of a G05... I still have my wireless charger, alcantara, soft close, head up & touch display and so on...

Any bet everyone will avoid the 2020-2022 BMW's on the used market.
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      11-03-2021, 06:39 PM   #8
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Quote:
Originally Posted by LOW4LYF View Post
Because people still buying 2022 X7 with less options as my 2018 X5 ... lol

They just dropped the touch screen on some cars including the X7 but people still shopping like crazy. Nobody will want this vehicles in couple of years.
LOL. Several months ago when I said the shortage is helping car companies and chip producers to laugh all the way to the bank at the expense of consumers I was laughed at. A shortage plus easy credit but impatient consumers is the perfect alignment of the stars. It is great to be in the automotive and chip business right now!

Taking nothing away for the BMW management. They have done exactly what their investors expect them to do.

It is interesting that people are reporting that dealer lots that used to be full are now empty, yet even for Mercedes, their unit sales was down 30%, so technically the lots should be 30% less full, not empty. Manufacturers are getting better at minimizing cars on lots, which helps drive up demand by creating a greater sense of shortage than there is…basically shortage of anything and everything is helpful right now.

Great cars, great marketing and unstoppable consumers even with gas at record prices…will be interesting to see how this plays out in a few more quarters.

My 2 cents worth…
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      11-03-2021, 07:59 PM   #9
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Quote:
Originally Posted by LOW4LYF View Post
How old are you my son?

BMW is removing options almost on a weekly basis but only giving a super small credit for missing options if they even do! On top every new X in California has 30K on top by the dealership as market adjustment!

So this made me to buy a used F85 insted of a G05... I still have my wireless charger, alcantara, soft close, head up & touch display and so on...

Any bet everyone will avoid the 2020-2022 BMW's on the used market.
Mercedes is building the all-new S-class without HUD, massaging seats, rear climate controls, etc. That’s the 100% redesigned for this year flagship model. If you are concerned people are going to avoid 21-22 BMW’s on the used car market, allow me to align you with reality - it’s everyone. Not just BMW. If anything, BMW models will be better off than their competitors at that time, all of which decontented more heavily, earlier.
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      11-03-2021, 08:17 PM   #10
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Mercedes is building the all-new S-class without HUD, massaging seats, rear climate controls, etc. That’s the 100% redesigned for this year flagship model. If you are concerned people are going to avoid 21-22 BMW’s on the used car market, allow me to align you with reality - it’s everyone. Not just BMW. If anything, BMW models will be better off than their competitors at that time, all of which decontented more heavily, earlier.
Well...I will not buy a premium product without premium features, no matter what brand.
I'm not blaming the OEM, just surprised people pay top dollar for less luxury.

It's like buying a new phone without a camera...

Fine with me to wait till 2023 or further, life could be worse than driving an F85 as temporary solution.
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      11-03-2021, 08:25 PM   #11
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This just in: inflation helps seller of things people want
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      11-03-2021, 09:07 PM   #12
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Quote:
Originally Posted by FCX5 View Post
Quote:
Originally Posted by LOW4LYF View Post
Because people still buying 2022 X7 with less options as my 2018 X5 ... lol

They just dropped the touch screen on some cars including the X7 but people still shopping like crazy. Nobody will want this vehicles in couple of years.
LOL. Several months ago when I said the shortage is helping car companies and chip producers to laugh all the way to the bank at the expense of consumers I was laughed at. A shortage plus easy credit but impatient consumers is the perfect alignment of the stars. It is great to be in the automotive and chip business right now!

Taking nothing away for the BMW management. They have done exactly what their investors expect them to do.

It is interesting that people are reporting that dealer lots that used to be full are now empty, yet even for Mercedes, their unit sales was down 30%, so technically the lots should be 30% less full, not empty. Manufacturers are getting better at minimizing cars on lots, which helps drive up demand by creating a greater sense of shortage than there is…basically shortage of anything and everything is helpful right now.

Great cars, great marketing and unstoppable consumers even with gas at record prices…will be interesting to see how this plays out in a few more quarters.

My 2 cents worth…
That's a 5 cent comment. I couldn't agree more.
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      11-04-2021, 06:54 AM   #13
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Mercedes is building the all-new S-class without HUD, massaging seats, rear climate controls, etc. That’s the 100% redesigned for this year flagship model. If you are concerned people are going to avoid 21-22 BMW’s on the used car market, allow me to align you with reality - it’s everyone. Not just BMW. If anything, BMW models will be better off than their competitors at that time, all of which decontented more heavily, earlier.
Well...I will not buy a premium product without premium features, no matter what brand.
I'm not blaming the OEM, just surprised people pay top dollar for less luxury.

It's like buying a new phone without a camera...

Fine with me to wait till 2023 or further, life could be worse than driving an F85 as temporary solution.
same here. no chance I'll buy a $85k AUD car without adaptive Cruise control when a $50k Mazda has it. I've been closely watching the demo car market, really serious to pick a good deal, but the absence of adaptive Cruise control is a deal breaker. hope the cars rust away on the lots, otherwise the car makers well take all the wrong lessons - that customers are idiots that can be rorted.
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      11-04-2021, 10:00 AM   #14
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How old are you my son?

BMW is removing options almost on a weekly basis but only giving a super small credit for missing options if they even do! On top every new X in California has 30K on top by the dealership as market adjustment!

So this made me to buy a used F85 insted of a G05... I still have my wireless charger, alcantara, soft close, head up & touch display and so on...

Any bet everyone will avoid the 2020-2022 BMW's on the used market.
Mercedes is building the all-new S-class without HUD, massaging seats, rear climate controls, etc. That’s the 100% redesigned for this year flagship model. If you are concerned people are going to avoid 21-22 BMW’s on the used car market, allow me to align you with reality - it’s everyone. Not just BMW. If anything, BMW models will be better off than their competitors at that time, all of which decontented more heavily, earlier.
100% agree. Every discussion on here, the mentality is that what I want is what everyone wants. One of the Mercedes dealers in the GTA are selling S Class' with no discount making 16-18k a unit even with tech omitted - and that's a car that was marketed as being technologically advanced. No one is complaining and no one is cancelling.

The features that are being omitted are not critical - they are not things that everyone would want to option. If BMW took away all driver aids/assistance, I would not care one bit regardless of which budget manufacturer had it as standard.
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      11-04-2021, 10:59 AM   #15
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It is interesting that people are reporting that dealer lots that used to be full are now empty, yet even for Mercedes, their unit sales was down 30%, so technically the lots should be 30% less full, not empty. Manufacturers are getting better at minimizing cars on lots, which helps drive up demand by creating a greater sense of shortage than there is…basically shortage of anything and everything is helpful right now.
Mercedes' average transaction price went from $59,899 in 2020 to $75,369 in 2021, even with 30% less unit sales they are making a killing.

Turns out that demand for luxury vehicles wasn't as elastic as people thought. When someone who is used to BMWs & Benz is faced with these cars being $10k more, he doesn't actually switch to a Hyundai Santa Fe. He'll still buy the premium brands.
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      11-04-2021, 11:07 AM   #16
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It is interesting time for car shoppers and the manufacturers. Hopefully we will see some interesting lessons learned.

Some people see things as must haves while others don't. Maybe car manufacturers can leverage this to make options more plug and play in the future. Make it easy to add a HUD, SiriusXM, etc after build. Then have a sales opportunities around these additions after build.

Other than having to get Summer Tires on my X3, a number of subtractions could have been made and I would have been perfectly fine. HUD, Sirius, Lumbar, Touchscreen are all items that I would have considered giving up. The M40i engine and driving still would have won me over when compared to a loaded Mazda CX9 (which was in my test drive).
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      11-04-2021, 12:27 PM   #17
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It is quite interesting to see how the market works - less options, less for your money, and yet the consumers are paying MORE than MSRP. Just goes to show you how unpredictable everything is.

The other side of the equation is also fueled by the low interest rates for borrowers as a result of unprecedentedly low reserve rates set by the fed reserve. More (cheap-to-borrow) money out in the market, the more consumers are willing to spend despite the higher prices.

I am not sure when all this will come to an equilibrium, but certainly as someone in the market for a car, it’s not a good time to be a buyer. I think it’s also important to recognize that we, the consumers, may be setting a precedent for the dealers where they may expect this “market adjustment” to be commonplace in the future…
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      11-04-2021, 03:43 PM   #18
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Quote:
Originally Posted by FCX5 View Post
It is interesting that people are reporting that dealer lots that used to be full are now empty, yet even for Mercedes, their unit sales was down 30%, so technically the lots should be 30% less full, not empty. Manufacturers are getting better at minimizing cars on lots, which helps drive up demand by creating a greater sense of shortage than there is…basically shortage of anything and everything is helpful right now.
Mercedes' average transaction price went from $59,899 in 2020 to $75,369 in 2021, even with 30% less unit sales they are making a killing.

Turns out that demand for luxury vehicles wasn't as elastic as people thought. When someone who is used to BMWs & Benz is faced with these cars being $10k more, he doesn't actually switch to a Hyundai Santa Fe. He'll still buy the premium brands.
Not elastic in the short term. But we'll see. Apparently people in Mercedes (and BMW) showing up at food banks and then needing rent subsidy and stimulus checks etc is a thing…

https://www.dailysquib.co.uk/world/3...-food.html/amp
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      11-04-2021, 05:16 PM   #19
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Originally Posted by BobBMWX3 View Post
It is interesting time for car shoppers and the manufacturers. Hopefully we will see some interesting lessons learned.

Some people see things as must haves while others don't. Maybe car manufacturers can leverage this to make options more plug and play in the future. Make it easy to add a HUD, SiriusXM, etc after build. Then have a sales opportunities around these additions after build.

Other than having to get Summer Tires on my X3, a number of subtractions could have been made and I would have been perfectly fine. HUD, Sirius, Lumbar, Touchscreen are all items that I would have considered giving up. The M40i engine and driving still would have won me over when compared to a loaded Mazda CX9 (which was in my test drive).

No, it goes the other way around. All features will be onboard and active via software if you pay for it.

The easiest way to make money is copy and build the same thing over and over.


If you can live without all the features, why buying BMW at all and paying premium?


If I don't need leather dash, soft close etc. why not pick another brand for 20K less?
My first BMW was a E32 which I bought 25 years ago. This tank was from another planet and nothing but nothing was even close to it back in the day! Premium...
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      11-05-2021, 11:16 AM   #20
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It is quite interesting to see how the market works - less options, less for your money, and yet the consumers are paying MORE than MSRP. Just goes to show you how unpredictable everything is.

The other side of the equation is also fueled by the low interest rates for borrowers as a result of unprecedentedly low reserve rates set by the fed reserve. More (cheap-to-borrow) money out in the market, the more consumers are willing to spend despite the higher prices.

I am not sure when all this will come to an equilibrium, but certainly as someone in the market for a car, it’s not a good time to be a buyer. I think it’s also important to recognize that we, the consumers, may be setting a precedent for the dealers where they may expect this “market adjustment” to be commonplace in the future…
IMO a majority of customers in this segment want to lease their vehicles and may also write off the payments as a business expense. The high residuals of this segment make leasing attractive. Lesser priced vehicles have lower residuals and customers are less sensitive with regards to the difference in payments.
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      11-07-2021, 11:37 AM   #21
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BMW Group Quarterly Statement - Sep 30, 2021 (released on Nov 3, 2021) featuring 2020-2021 figures: see here (PDF - 36 pages).

Note: it features 24 times "semiconductor".
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