bmw falls victim to u.s. success

[Ed Kellock]

Hey, look at that, the word "unintended" is used in a statement about
Audi without any reference to The Debacle.

Ed

On 3/25/08, Dave Eaton <Dave.Eaton at clear.net.nz> wrote:
> from the autonews wire - an interesting point of view for those of us used
> to paying real money for our cars...
>
> dave
> '03 rs6
> '04 allroad tdi
> ---------------------
> BMW falls victim to U.S. success
>
> Guido Reinking
> Automotive News Europe
>
> If there were an award for last year's most profitable premium brand, it
> would be an unequivocal victory for Mercedes-Benz.
>
> After cutting Chrysler loose, profits at Daimler, Mercedes' parent, have
> shot upward like an untethered balloon. None of its rivals could keep up.
>
> There was a surprise in last year's results, though. Audi's profit margin
> topped BMW's. And Audi accomplished the feat without a financial arm of its
> own. Parent company Volkswagen handles the brand's leasing and financing.
>
> BMW's comparatively bad showing demonstrates just how right CEO Norbert
> Reithofer has been in pursuing drastic cost reductions. Anyone who
> continually sells more cars without making more money is heading in the
> wrong direction.
>
> BMW's results can be excused only partly by rising raw material prices. In
> the United States, BMW has become a victim of its own success. The weak
> dollar most hurts the import company selling the most in the United States.
>
> But some of BMW's problems are homegrown. The 7 series has $2,500-$5,000
> dealer incentives in the United States. BMW wouldn't need to support the
> vehicle if it were more attractive.
>
> The U.S.-built X5 premium SUV scores well with U.S. customers and reportedly
> has 60 percent local content. But its expensive engines and transmissions
> still come from Europe and must be paid for with a weak dollar. So it hasn't
> had the effect on BMW coffers that the company was seeking.
>
> In a perverse sense, Audi should be grateful to Ralph Weyler, its departed
> sales and marketing chief. Contrary to his clear mandate, Weyler only
> halfheartedly looked after the American market.
>
> Weyler's inattention helped put Audi far behind Mercedes and BMW in U.S.
> sales. But as an unintended positive result, the dollar's weakness today is
> barely affecting the company.
>
> That's certainly a silver lining. In fact, it makes one wonder if the folks
> at Audi might be secretly hoping for Americans to buy a record number of
> BMWs again this year, too.
>
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