When the second generation X3 goes on sale early next year BMW wants more of its American customers to start special ordering the crossovers rather than buying them off the lot. Custom orders are more the norm in Europe where about half of all BMWs are spec'd up before being delivered to the buyer, and BMW has been promoting its Individual program which allows customers to pick and choose the colors and materials in their vehicles.

The advantage to BMW is that these optioned vehicles have much higher profit margins than the standard configurations typically stocked by dealers. If BMW can succeed in getting more custom orders for the X3 and other models it will improve the bottom line for both its dealers and the automaker as lots won't have to stock nearly as much inventory. The biggest problem is changing American's desire to show up at a dealer and drive something off the lot that day.

Promoting build-to-order will be much easier with the new X3 because production of the new model will be moved from Austria to the recently expanded Spartanburg plant in South Carolina. Building the crossovers here will allow BMW to drastically cut delivery times and BMW will also be more heavily promoting its factory delivery program and the driving classes it offers at the adjacent Performance Center.

[Source: AutoWeek]

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