How BMW gamed its dealership system to sell more cars

We've seen it before and we'll see it again, quite possibly before the end of the year: A luxury brand padding its numbers with questionable "sales." This time it's BMW, according to a report in The Wall Street Journal, although there have been rumors of arch-rival Mercedes-Benz doing the same thing in past years.

Regardless, fudging the numbers ain't right, and the Journal paints a pretty compelling case for BMW having done just that. The scenario involves the practice of selling dealer "demos." These are supposed to be vehicles that dealers buy to allow customers to test drive or use for loaners and such and then sell as used cars. But according to the report, that's not what's happening. In July BMW offered a one-day, last-day-of-the-month sale price to dealers to buy demo vehicles at discounts of up to $7,000. Those units were booked as sales by the manufacturer, but dealers aren't really using the vehicles as demos, they're putting them on the lots as new cars.

Last month BMW reported sales of 21,297 in the U.S., taking a 1,900-unit lead over Mercedes. The German automakers are locked in a fierce battle to emerge on top of the U.S. luxury sales crown, which BMW narrowly won in 2011.