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  • BMW i8 and BMW i3

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Tesla isn't the only manufacturer that is facing a backlash over its plans to sell cars directly to customers. BMW is under fire from its German dealerships over its desire to sell its cars via the internet.

BMW has plans to sell the new i3 through the World Wide Web, while a "Mobile Sales Force" will be making house calls. According to Automotive News Europe, Head of German Sales Roland Krueger told German weekly Wirtschaftswoche, "We can imagine that Internet sales could be expanded to all models." This is the particular caveat that has traditional brick-and-mortar dealers so up in arms.

According to the head of BMW's German dealerships Werner Entenmann, "We told BMW in no uncertain terms that we cannot accept direct sales channels." Reuters reports that an anonymous dealer has gone so far as to pledge not to use the sales force in Germany. Krueger, for what it's worth, told Wirtschaftswoche that the "backbone" of BMW sales will still be traditional dealerships.


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    • 1 Second Ago
  • 19 Comments
      Kumar
      • 2 Years Ago
      At the very least, auto manufacturers should be able to sell direct in a state where they are manufacturing. For example, Subaru should be able to sell Outbacks direct to anyone in the state who wants to hoof it to their factory and remove the standardized delivery charge (that otherwise keeps people 10 states away from paying a ridiculous delivery fee when a vehicle is actually delivered).
      jonnybimmer
      • 2 Years Ago
      Just as I feel with the problems Tesla is current dealing with, I believe that a company should have the freedom to distribute general consumer items however they feel. You can buy a Trek bike or Apple iPod from a general retailer, a company store front, or from the company's online store, so why should cars be any different? Personally, I think that even if online purchasing was an option available here in the US, it would never truly replace in-person sales as a car purchase is not exactly something most people take lightly. I could never imagine just looking at pictures/videos and some spec/feature sheets and buying a brand new car off that limited info, but not everyone takes cars as seriously as I do. I have met people who just simply want to get the next newest model of something as soon as their lease ends or have followed a tradition of purchasing a new car (either the same or similar model) every X number of years, so I can see some people who'd actually find this type of sales to be beneficial.
      John
      • 2 Years Ago
      i doubt theyll expand that plan to all bmw models, but it is a good idea for that little car. that car should be void of any dealer markups even at the least associated with having the car on a dealer lot. it is already expensive for a small car
      AcidTonic
      • 2 Years Ago
      Back in the day Ice was delivered to the home fresh... The Ice "guild" actually petitioned congress to ban these "refrigerators" which were "stealing" their profits. Thank god they lost. No one likes artificial monopolies.....
        icon149
        • 2 Years Ago
        @AcidTonic
        Nice historical reference... can't wait for auto dealerships to become just another footnote in history.
      mikeybyte1
      • 2 Years Ago
      Car dealers need to suck it up and stop being such cry babies. When online retailers emerged like Amazon you didn't see Walmart cry. Apple has retail stores plus sells their products in Target, Best Buy, etc. 1-800-Petmeds did not end your ability to go to your local vet for pills for your dog. Cars will always need to be serviced - under warranty - so BMW is not about to shut down it's dealer network. Change is often a good thing. Deal with it.
        Feurig
        • 2 Years Ago
        @mikeybyte1
        Your analogies don't really work. Amazon is an online retailer of thousands of different products, much like Wal-mart. Apple does sell in Wal-mart, but Wal-mart doesn't rely on Apple's business to stay in business. If BMW were to start selling all cars online, you can imagine what that might do to the franchises. I can understand why employees in the auto industry don't want to lose their jobs...
          mikeybyte1
          • 2 Years Ago
          @Feurig
          Many manufacturers let you buy direct, as well as from retailers. Why can't we have both options?
          kEiThZ
          • 2 Years Ago
          @Feurig
          Actually, employees might be better off. They'd be working directly for BMW. Not Joe's BMW. The only loser is the franchisee.
      Scooter
      • 2 Years Ago
      I see the greedy car dealer problem isn't confined to America. I really think this should be different and shouldn't be seen as a threat. Super car makers have been using the "private" buying experience for years. Where are the dealers crying about that? I think the key difference between Model S buyer, or i3 and gas propelled cars is the expectations. Dealers prey on the "aimless" consumer. The one that is willing to over reach in credit, "is just looking for something reliable or XXX", the person he/she can manipulate into buying any car. These electric buyers are quite different. They know "exactly" what they are buying. When your shopping Model S or I3, your not somebody with a $35,000/year income looking to over reach your credit and get bamboozled into anything nice you can barely afford. Your somebody shopping 1 car, and with serious intentions to buy that 1 car and nothing else. Besides, dealers thrive more on used sales and maintenance rather than "new" car sales. Its just the greedy dealers wanting to dip their hands on these pricey EVs, so they can make the $40,000 i3 over $45,000 and then some. Like dealers marking up FRS or BRZ due to high demand and low supply...come on now.
        Feurig
        • 2 Years Ago
        @Scooter
        Everything in life is a deal. This type of deal-making isn't confined to the car business.
      sp33dklz
      • 2 Years Ago
      This is exactly why I've stopped purchasing cars at dealerships. There's no need to pay a markup on anything, period. By the time a vehicle gets to you from a new car dealership it's been marked up in price by at least 5 entities. Suppliers, Manufacturers, Transporters, Dealerships, then good ol' Uncle Sam.
      Feurig
      • 2 Years Ago
      Internet sales are already pretty wide-spread with dealerships becoming formalities. Internet-buying is going to become much more widespread.
      SloopJohnB
      • 2 Years Ago
      OK, here's the deal....dealers in the US complain bitterly that they make very little profit on new car sales (yeah, right!) but have to put up beaucoup coin to set up new car dealerships and showrooms....AFAIK most dealerships are doing quite well if only because of their outrageous service operations. As long as the dealerships post their labor rates I have been told the OEM's pay them that rate for warranty maintenance and repair (but I don't believe it). If this were truly the case the dealerships ought to be crazy happy that the profit loss leaders (new car sales) would be eliminated for the most part and people would buy their cars online. Or, could it be that new car sales are a significant profit center for dealerships? Enquiring minds want to know. Follow. The. Money.
        Rich
        • 2 Years Ago
        @SloopJohnB
        Depending on brand/make (of course) this will differ: Per new vehicle sold at BMW dealers, between $1,000-$7,500 profit is had on each sale.
        Feurig
        • 2 Years Ago
        @SloopJohnB
        New car sales do generate money, but the average gross per unit is dropping pretty significantly. Used car operations are the focus of dealerships now. From a high-volume OEM, a GPU (Gross Per Unit) of $500 is pretty normal. Service operations are reliable means of making income. Regarding whether or not new car sales would be eliminated, in order to brandish the name of "Mercedes-Benz" for instance, you have to sell new cars and follow the OEM guidelines. There are plenty of used car dealerships that do well, but it takes much longer for those dealerships to gain respect from customers if they don't have a brand name associated with them. New car gross however IS declining, so I see internet sales become more prevalent.
      bofdem
      • 2 Years Ago
      "World Wide Web" ? When was this story written, 1995?
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