Filed under: Trends
BMW posts record revenue, sales in 2005
Both revenue and unit sales hit an all-time
record in 2005, BMW announced today. Sales volume in cars grew nearly 10 percent year-over-year, and strong sales
across the BMW Group more than offset unfavorable exchange rates and rising material costs.BMW AG chairman Helmut Panke (at right) sees continued success in 2006, saying, "Our aim is to increase sales volume yet again and once again set a new record."
Today's news from Hyundai and BMW, at opposite ends of the economy-luxury car spectrum, highlights the tough job facing Ford, GM and Chrysler in the U.S. market. It's no longer a question of whether the U.S. automakers can design and build competitive cars - they can - it's whether or not they can turn themselves around quickly enough to retain competitive market share.
[Source: BMW Press]
_opt_thumbnail.jpg)
Reader Comments (Page 1 of 2)
Joe 5:28PM (1/26/2006)
HOW THEY DO IT.
I work for the Germans. They don't sell huge amounts of cars. Only a fraction compared to the Americans and Japanese. However, they are image driven. So are their buyers, and they are willing to spend extra (too much) to feed their image.
PORSCHE AND BMW ARE THE KINGS OF OVERCHARGING THEIR CUSTOMERS. You almost have to be crazy to buy a Compact 3-Series for $40K. The car is the size of a Cadillac STS! Don't even get me started on what the average repair/maintanence bill is.
PORSCHE PRICES HAVE SKY ROCKETED. The media says nothing about the fact that the 911's price has almost doubled over the past 5-10 years. You would have to be crazy not to by a Corvette Z06!
Image sells, there will always be irational buyers, willing to over pay to boost their image. DOMESTICS WILL NEVER BE ABLE TO SELL TO THES PEOPLE.
Reply
Kevin 5:59PM (1/26/2006)
Image may sell...but crap is crap. I have owned domestics, European and Japanese cars over the years and from my experiences can tell you this...
I loathe to pay an extra nickel for 'image' on a competent and well thought out car (like a BMW three series) when there are just too many cars that are almost as good for thousands less.
But I can also tell you that, more than this, I loathe paying an extra nickel in repairs or upgrades for a domestic vehicle that is so poorly executed in the first place through built-in cost cutting measures and sloppy engineering that it makes it easier for better built alternatives to be able to charge just for their image.
A Z06 is a nice car...too bad so many other of the general's vehicles feel like 20 year old appliances just waiting to be discounted at birth.
Reply
JL 6:09PM (1/26/2006)
Joe, you are so right! BMW's style is so ugly and their reliability is horrible and yet, those yuppies keep buying them. It is the yuppie image they are buying. If the Bangle butt appeared on a Fiat, would he be getting such high praise from the so called automotive journalists? Not! Nobody would care. As a matter of fact, Chris Bangle did design some odd ball looking Fiats in the 80's but no one gave a damn. The paradigm shift started at Fiat but nobody cared until Bangle moved to Bimmer land. Its all about image and marketing.
Reply
Charles S 6:16PM (1/26/2006)
Errr... if BMW and Porche are kings of Image Branding, then how would you categorize...
- HUMMER
- GT40
- Cadillac Escalade
- HEMI+whatever
Yeeeaahhh... cauldron calling the kettle black...
Reply
Ray 6:37PM (1/26/2006)
Umm...don't lump Chrysler into that boat. They've figured out how to sell cars. It's like Bill Ford said on Monday "bold, innovative ideas"...that's what sells cars. Take a look at the Dodge Charger, the 300, the Magnum, The Caliber...all are or will be top-sellers.
Reply
Mike 7:51PM (1/26/2006)
Bangle gets high praise?!
Reply
Andy 8:01PM (1/26/2006)
Maybe it's image and good branding, but the success of BMW shows there is a market for well-built performance sedans in the $40k range, just like the Japanese showed in the 80's that there is a market for low-priced compact cars, against conventional wisdom. The real question is, why are the domestics failing to win this market? I don't think anyone will dispute that a BMW handles better than a Cadillac (maybe a G35 does), but why aren't domestic companies trying harder to win this niche from BMW?
Reply
Joe 10:39PM (1/26/2006)
#7 I believe it is a lost casue. You can't sell a domestic product to this buyer. Cadillac sells well to those who truly want to by American. They aren't luring away MB/BMW/Audi core customers. Domestics simply isn't trendy or exclusive enough. The days of well to do Americans buying American is over. These people envy foreign products. Even though the Germans build unreliable cars, with staggering maintenance costs. It's like being part of a "Yupee" club.
I miss typed in the earlier post. What I ment is, you would have to be irrational to buy a compact BMW 330i for $37K+ over a mid/fullsize Cadillac STS for $40K. Can you say rip-off!
Reply
doc reed 11:58PM (1/26/2006)
You guys are missing the point - no big surprise. Have you ever driven a BMW? It's not about how they look, it's how they work, what they are like to drive. A Big Mac and a fine steak may both fill you up, but there is more to food than taking up space and there is more to driving than just getting from a to b.
There is more to a car than how they look, too. Taste is subjective, but most American cars are pretty blah (Ford 500, Chevy -pick one, etc). I have a 2000 528it, and I think there is no more attractive car on the road. You may disagree, but who cares.
I love to drive, and BMW's are for people like me. For all those who think driving is just transportation, stick to you Explorers and Camrys. It has nothing to do with image, only how the damned thing works.
Reply
Kevin 12:00AM (1/27/2006)
Joe, I don't think it's a lost cause. The big three just have to continue to make better products by spending more of their budgets on R&D and product development and less on smoke and mirror marketing and whore house rebate programs that devalue their product right out of the box.
If this segment of buyers will only "buy the badge" then the big three will have to build their badges up the same way the propeller heads in Bavaria did - start with a great engineering and design, develop the product over time, and charge too much for it until it becomes an 'aspirational brand'.
Reply
Felix 4:41AM (1/27/2006)
9, i couldn't agree more. I used to think BMW just sold image, and in fact I really wouldn't want to own one precisely because of that image. I dont want to be thought of as being a "yuppie". However then i got a job where i got to drive other peoples (often very nice) cars. The first time i drove an E36 BMW i instantly understood what it was all about. I wouldn't want one for a myriad of good reasons, but goddamn do those cars drive nicely.
Reply
Doogs 8:08AM (1/27/2006)
I think it is safe to say that, while BMWs are great drives, and numbers of people buy them for this very reason, there are also a whole lot of people who buy them for the image.
Of course, I could also take the above sentence, replace "BMWs" with "Jeep Wranglers", and "drives" with "offroaders", and that statement would be true as well.
In my opinion, BMW's success is attributable to three things.
1 - BMW's design philosophy. 50/50 weight balance, rear-wheel drive, outstanding handling. And, like it or not, the 3 and 5-Series are standards in their segments. They are the cars everyone else guns for...it's like when some electronics company announces the next "iPod Killer"...they just reaffirm that the iPod is the top of the heap.
2 - I don't know about anybody else, but it seems to me that there has been a definite shift in the past five to seven years, and that handling and "fun-to-driveness" have become more and more important. Good news for BMW. Bad news for Lincoln. Cadillac seems to have done an about face and abandoned its wallowing ship dynamics just in time.
3 - The mistakes of others. Chief among them Mercedes. Electrical bugaboos, quality problems (that have been very public...fire the PR guy), and a model lineup that even an enthusiast might struggle to keep straight. I mean come on - C, CL, CLK? And then do you want the CLK coupe, or convertible? And why is the SLK ONLY a convertible? Don't even get me started on the R Class. Maybe in Europe...over here...no way it'll be a success.
Reply
Joey (Kev) 10:47AM (1/27/2006)
Whoever says a Chevy or a Ford or a Camry are the same thing as a BMW except for the image shouldn't claim knowledge about anything more complex than a paper cup.
Reply
David 10:58AM (1/27/2006)
The rich get richer, and the poor buy Hyundai's.
Nothing new here...
Reply
pavster 11:36AM (1/27/2006)
One American manufacturer has figured out how to tap into this market, but they don't exactly make cars. It's Harley Davidson. Go figure.
Reply
JohnV 12:02PM (1/27/2006)
Joey, you could not be more correct. Some of the comments on this blog are ridiculous. Ever get the feeling most of the peeps writing comments have NEVER owned a BMW or possibly even a car for that matter.
BMW is not solely an image brand. Quality both inside and out are 2nd to none. Performance is amazing. They look great. Service is covered by the dealership for the life of the warranty. Of course, there is personal preference to take into account here, but I have lived with these cars.
I have owned several BMW's and have NEVER had an issue with them (2002 M5, 2004 645 Ci, 2006 330i).
I have a 2002 Brabus CLK. I've owned a Porsche, a 2005 Chevy Corvette Z51, a 1996 Chevy Camaro SS, a Toyota Supra Twin Turbo, a 2005 Caddy STS4...let me tell you right now, NO American car can hold a candle to a BMW & most Japanese cars cannot either. (the Supra was amazing and I still kick myself for selling it).
Some of you love to comment on what an amazing car the new Z06 is. YES, from a performance standpoint...almost impossible to beat for any dollar amount. But, have you gotten into one??? Driven one??? Lived with a new C6 of any sort? I have and can tell you the quality of materials used inside is garbage compared to the Euro and Japanese competitors.
Yes, the quality has taken major steps forward, but is by no means worthy of the price tag placed on these cars.
Oh, any of you BMW haters ever compared the resale value of your beloved Caddy or Chevy's to BMW?
Again, LMAO at Joe, a 330i for $46K loaded is NO rip-off. I had an 05 STS4 loaded and it cannot even begin to be compared to the 330i, let alone it's competitor in class, the 550i, again LMAO. Drive em both back to back and you'll see. I cannot imagine you have done that let alone live with them and own them as I have....
Reply
Tankstelle 1:17PM (1/27/2006)
I work for a company where we get to drive most of the new vehicles being introduced by manufacturers. I've driven the IS, G35, CTS, GS300, and Lincoln LS. The 2006 330i is head and shoulders above all of those vehicles. I'm seriously considering moving farther from work just because I love the drive so much (well ok lower housing prices too). You can call me a yuppie or image whore or whatever you want, but all I care about is having a good time during my 60 minute commute each morning and afternoon. The new E90's are a pretty easy choice if you are buying a car because it is fun to drive.
Reply
Ron 2:26PM (1/27/2006)
The cost argument is actually not really valid. By paying more for a BMW you actually aren't getting 'ripped off' compared to a similarly equipped domestic. I just did a quick check for a 3-year, nothing down lease on a 300 Limited, and it's more than $100 a month more than I'm currently paying for my 3-year, nothing down 325Ci lease. The funny thing is that the list for the 300 is about $7K less than the list for my 325. The same depreciation problem applies to a purchase. So given these facts can somebody tell my why on earth I would pay more for the 'less expensive' car?
Reply
Hammer 4:14PM (1/27/2006)
RON, I'VE WORKED FOR BMW.
You are tooling around in a compact car the size of a neon, not a 300. The 300 is a mid/fullsized car. A car you don't have to be embaressed to put people in your back seat in. FURTHERMORE, ONCE YOUR WARRANTY EXPIRES YOU'LL HAVE ONE OF THE HIGHEST VEHICLE MAINTENANCE AND REPAIR COSTS. And don't forget, two years ago BMW raised their prices to include the maintenance in their warranty. A maintenance program the recommends a 10K mile oil change interval.
Reply
Kevin 6:02PM (1/27/2006)
Felix,
I have the exact same dillemma. I had the chance to dare to compare my FWD sports sedan with an M suspended 330 during a performance driving track event a couple of years back. At 90 percent and above, the bimmer worked perfectly and felt great while my ride felt like a dump truck.
I still have a hard time justifying the BMW poseur premium -- whether it is real or imagined -- even though the bimmer is one of the best suspended cars I've driven (best was a Boxster S).
...damn those Huey Lewis lovin', MBA waving 80s yuppies for ruining it for us all...
Reply