The Car and Truck Fleet and Leasing Management Magazine

BMW Will Sell Fewer Cars in America to Avoid Losses

October 10, 2008

MUNICH, GERMANY – With 16 straight years of continuous growth in the U.S. market, the troubled U.S. economy has caught up with the manufacturer. BMW U.S. CEO Jim O’Donnell believes the good times may finally be coming to an end. In order to avoid going into the red, he now wants to stop pushing for maximum sales volume until conditions improve, suggests shifting U.S.-bound cars to markets where profits are better, and even believes reintroducing four-cylinder engines could help the automaker cope with high gas prices, according to Automotive News.

O’Donnell expects BMW sales to fall 10 percent in 2008, the first year they haven’t grown since the early 1990s. And as part of this strategy, BMW will shift 44,000 vehicles allocated for the United States to other markets where sales will be more profitable. Even popular vehicles like the X3 are being moved to other countries because they aren’t making money.

O’Donnell also plans to change some of the ways BMW does business, first by cutting leasing by at least 10 percent, eliminating 90 North American jobs, working to improve customer satisfaction, and ending the company’s annual December clearance event.

And, according to Automotive News when O’Donnell presents the details of his plan to his German superiors in January, he intends to suggest the automaker bring four-cylinder engines back to the American market. Currently, BMW USA offers nothing smaller than an inline-six-cylinder powerplant, while European customers can choose from a variety of fuel-efficient four-cylinders and diesels.

BMW has already reduced its leasing activity by 13 percent, and incentives will not be offered on the manufacturer’s three newest models — the 1 Series, X6, and M3.

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