jrmckinley

https://www.stltoday.com/business/lo...ae0807a9f.html

"The company, planning 21 new or updated models this year, reported its first loss in a decade in the main automotive division in the three months through March, after booking a 1.4 billion euro provision ($1.6 billion) for potential European Union fines over collusion. Even excluding this charge, the unit’s return on sales dropped to the lowest point in 10 years."

bitkahuna

iTrader: (20)

Right, the loss came from yet another EU govt money grab... that’s how they keep their racket going.

Johnhav430

I wonder how they afforded to do what they did with Takata, and that was to provide any BMW owner affected by the recall, who wanted a loaner, a car to drive until they had replacement parts to install. For me that was 4 1/2 mos., but some had loaners for close to 1 1/2 years. Contrast that to Mercedes and Audi, and Toyota. That had to hurt at some point...their brand name is everything, probably less so profits.

jrmckinley

Correct on the loss, but this statement also holds some importance "Even excluding this charge, the unit’s return on sales dropped to the lowest point in 10 years."

I find it interesting that BMW is struggling (declining may be a better word) when I can't think of a single brand that has made more models (cars, CUV's, etc.) for every age and every price point than BMW. They have a 1 series all the way up to the 7 series in cars, have tons of CUV's, etc. I saw a BMW 2 series a couple of weeks ago and didn't even know those existed.

situman

This is the exact issue that is plaguing them. You lose cost efficiency and economy of scale with so many models, and that isnt even counting the number of packages that each model offers. Making 20 different doors for 20 different models that sells only in the thousands can't be cheap or efficient.

jrmckinley

Interesting point. You may be right, there may be too many combinations.

Och

iTrader: (3)

I think its the lease rates. When you can lease a 50-60k car for $400 a month, math just doesn't add up.

mmarshall

Agreed. In addition to Brexit, it may (?) be time for a Gerexit.

nate101

I don't pretend to know anything about BMW's financial situation but agree it is almost laughable how many random models and sub-models they make now. Used to know the whole model range but when they started building these gran coupe variants I just gave up.

SNiiP3R

iTrader: (3)

True. But it also depends on how much the car really costs vs inflated price + price of the name tag. At the end of the day, 400 leases could still be profitable.

bitkahuna

iTrader: (20)

I believe bmw like many other smaller makers believed some time back that if they didn’t become bigger and have some economy of scale, they’d be reduced to a very tiny niche of very highly priced cars. They’re right on that point.

as far as all the doors and parts and logistics, etc., i’m sure bmw still shares a very substantial number of parts across models, particularly in the interior and ‘hidden’ systems, not to mention engines/drivetrains.

but in order to become ‘bigger’ you have to keep the train going delivering lots of product, and if there’s any economic glitches or changes or even disruption in the marketplace, you may have only one place to go, drop prices / increase incentives. Bmw has been attacked on several fronts: upstart sporty models (stinger, g70), more premium/luxurious/sporty competing mainstream vehicles, expanded lexus uv line (ux, nx, rx, gx, lx) and a much better and more sporty es, and of course the biggest disrupter of all, TESLA. Those thousands of models 3 being shipped HAS to have hurt bmw right in their mainstay market, the 3/4/5 series. The tesla 3 is ‘cool’, and VERY fast. Bmw’s i3 looks like junk comparatively. The announced tesla model y probably has others deferring purchase of bmw x1, x2, x3, etc. to wait and see.

Bmw’s leases have clearly been heavily subsidized, perhaps with the thought that they’d ‘make it up’ on CPO sales or lease returns, but that’s a big bet, and perhaps the market is kinda flooded with CPO cars for sale with price pressure there too.

Bmw may eventually end up with no place to go but merge or be bought by someone else (Toyota, Tata, VW come to mind).

Och

iTrader: (3)

Do you notice how there are almost no older BMW (or any older cars for that matter) in NYC? It seems that everyone is leasing brand new vehicles, and I don't understand what happens to them after the lease terms.

swajames

The math does add up. BMWFS is profitable. BMWFS contributes about 2bn profit per year, roughly 20% of typical group profit, and it has been consistently profitable.

SNiiP3R

iTrader: (3)

Yep. Most likely they end up on junk yards, used as donors.

RNM GS3

Shipped overseas.....huge business that used car dealers have sending it to former Soviet republics.
Good ones also are sold as CPO.

The huge investment into EVs and epic failure of i3 and i8 has hurt. Regulators will completely kill most independent auto companies eventually.