AutoExtremist's view of BMW

[woodym3]

Here's part of a report from the Detroit Auto Show.

"We’re still BMW (at least until further notice). BMW showed a much-needed freshening of the Z4, which makes the car actually attractive for the first time ever, and the new 7, which is light years more appealing than the previous one. Oh yes, there was an X6 hybrid, too, but that vehicle is so eminently forgettable and such a painfully overwrought joke that no one bothered to notice. BMW’s big problem going forward is that almost half their business in the U.S. was built up by way of subsidized leasing. They added volume and dealers with this strategy, and it all worked exceedingly well - at least until the financial markets’ collapsed and the credit crisis hit – but now, despite public comments to the contrary, BMW executives are nervous and for very good reason. BMW’s business, as much as any other manufacturer hinges on consumer confidence and affordable leasing programs. Without it, BMW could be facing a long, hard road of gradually contracting sales, something that they haven’t had to deal with in a long, long time."

The full report can be found here:

http://www.autoextremist.com:80/

[Nick325xiT 5spd]

My dad just leased a $78,000 sticker M3 'vert for less than $700/month. Any way you slice it, that's a losing proposition for BMW.

[Scotty]

Assuming it's a two year lease with a down payment, that's about $20,000 to the dealer for renting your dad a car. Assuming limited mileage, they'll get a pretty nice 2-year old M3 back at the end of the lease that should still be worth, say, $55K retail?

Doesn't seem like a huge loss. Anyway, it seems the dealer would be the loser rather than BMW. Maybe BMW NA subsidizes the lease? Dunno.

[Nick325xiT 5spd]

Assuming it's a two year lease with a down payment, that's about $20,000 to the dealer for renting your dad a car. Assuming limited mileage, they'll get a pretty nice 2-year old M3 back at the end of the lease that should still be worth, say, $55K retail?

Doesn't seem like a huge loss. Anyway, it seems the dealer would be the loser rather than BMW. Maybe BMW NA subsidizes the lease? Dunno.

3 year, 36,000 mile, zero down.

Both the dealer and BMWNA are subsidizing heavily - 54% residual is more than it'll be worth, 0.6% interest rate, and WAY under invoice. And I should note that it's not *that* exceptional a deal - the car was *advertised* at $10,000 under list.

Edit: And who the hell is dumb enough to put a down payment on a leased car? I hope no one on here is.