BMW sales surge may have been inflated

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Mercedes and BMW

Mercedes and BMW are competing to be the best-selling luxury automaker in the U.S. Image: Daniel Dionne/Flickr/CC BY-SA

Luxury car-maker BMW AG recently reported that it sold more than 21,000 units in the U.S. last month. However, according to the Wall Street Journal, those numbers may have been inflated.

BMW sales spike

According to the financial new agency, BMW is in stiff competition with Mercedes to be the top-selling luxury automaker in the U.S. In June, BMW had a very slim lead by only 1,985 units.

However, the momentum of BMW sales jumped ahead, and even broke some records, in July. It sold 1,696 of its 7 Series sedans, a higher number than in any previous month. The company also reported selling 2,555 of its 3 Series coupes, the highest number for 2012.

Demo and loaner models

However, in order to increase its lead on Mercedes, says the Wall Street Journal, BMW may have included some demo models into the mix.

On July 31 BMW made its dealers a one-day offer of discounts amounting to $7,000 for every car reported sold that day. To take advantage of the offer, many dealers, says the Wall Street Journal, included cars they bought to use as test-drive demos or loaner cars, and which had not actually yet been sold to consumers.

Most dealerships are required to hold onto to demo and loaner cars for several months before selling them as pre-owned models.

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Raising reported sales

Another contributing factor to BMW’s sales surge could be its dealer incentives. Late-summer incentives are common in the industry, when dealers want to clear out old inventory for the next year’s models. So it doesn’t explain why BMW was the car, lone among premium makers, to see such a sales spike.

According to Motor Trend, such practices are not unheard of. The U.S. Big Three automakers, GM, Chrysler and Ford, will often make hugely discounted sales of multiple vehicles to company fleets and to rental companies in order to raise sales numbers. Further, it reports that both BMW and Mercedes have been selling cars to a New York City rental fleet called ZipCar.

It is not the first time competing luxury automakers have fudged sales figures to get an edge on the competition. In 1998, says the Wall Street Journal, Cadillac and Lincoln were neck-and-neck until one month when Cadillac’s sales numbers shot up, giving it the lead. Later, however, it was discovered that the automaker bought cars back from its own dealers to inflate the numbers.

BMW still trails for the year

In spite of the surge, BMW still trails Mercedes in sales for the year. Mercedes-Benz sold 159,391 vehicles between January 1 and July 31, 2012. BMW sold 147,801 in the same period.

Sources

Wall Street Journal
Motortrend
Jalopnik

 

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