# Hoping for a good July



## ddeliber (Jan 31, 2013)

Ninong said:


> I think what you're saying in your *Edit* is that we should ignore the rest of your post, right? You could have just deleted it.
> 
> Anyway, just to make sure we have the numbers straight, Mercedes-Benz says: *"Mercedes-Benz USA Reports Best Ever June Sales of 28,473."* https://www.daimler.com/dokumente/i...tmeldungen/daimler-ir-release-en-20160701.pdf
> 
> You can find all of the official numbers for both BMW and Mercedes if you're willing to browse through all of their news releases on their website. That's where Automotive News and BMWBlog, etc. get their numbers, from press releases by the various manufacturers.


I figured I would leave it there as a reminder to myself to not post late at night when numbers are involved 

I do follow the numbers often as I am interested in that kind of thing. GCBC puts them all on one page so it is easier to see what is going on across the market. Things like that fugly little Buick Encore, why the hell is it selling so damn well... I looked in to it and that little hippo face is a pretty good car for the money. so I just helped my mother buy one. OR why is the X5 doing so poorly right now? Same with the 5 series. It is interesting to me because BMW is discounting the hell out of the 5ers, but not the X5. Why such a large discrepancy in action? Oh, and don't get me started on VW.


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## Ninong (May 20, 2014)

ddeliber said:


> It is interesting to me because BMW is discounting the hell out of the 5ers, but not the X5. Why such a large discrepancy in action?


Why would they discount the X5 when they cannot make enough of them to suppy worldwide demand? Don't forget, about 70% of the production from Spartanburg is shipped overseas. Maybe you're looking at only U.S. sales of the X5? If so, according to Ludwig Willisch, President of BMW of North America, the problem for the X5 in the U.S. was that, "The X5 was limited only by availability but that will continue improving in the months ahead." -- June 1, 2016.

I didn't find an exact breakdown of U.S. sales through June but here is the breakdown of U.S. sales through May 2016 of the X-series models made in Spartanburg. YTD through May the X3 was up 45.0%, the X4 was down 19.9%, the X5 was down 16.0% and the X6 was up 16.1%. Total U.S. sales through May 2016 39,286 compared to 37,891 same period 2015, up 3.7%. http://www.prnewswire.com/news-releases/bmw-group-us-reports-may-2016-sales-300278039.html

It's quite possible that worldwide sales of the X-series are up more than that but I didn't really search very hard. It's also possible that some of the potential X5 customers decided to switch to the X3 because maybe they couldn't find an available X5 in stock that they liked but they did find and X3. Remember, Americans are not like Europeans. Most of them are not willing to wait for an ordered car to come in. They want to drive home in one immediately to show all their friends and neighbors. Anyway, at least the X-series sales in the U.S. are up instead of down. Remember than U.S. sales of BMW brand are still down about 9% or so for the year compared to last year even though worldwide sales of BMW brand are up. So the rest of the world is making up for the slowdown in the U.S.


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## ddeliber (Jan 31, 2013)

Ninong said:


> Why would they discount the X5 when they cannot make enough of them to suppy worldwide demand? Don't forget, about 70% of the production from Spartanburg is shipped overseas. Maybe you're looking at only U.S. sales of the X5? If so, according to Ludwig Willisch, President of BMW of North America, the problem for the X5 in the U.S. was that, "The X5 was limited only by availability but that will continue improving in the months ahead." -- June 1, 2016.
> 
> I didn't find an exact breakdown of U.S. sales through June but here is the breakdown of U.S. sales through May 2016 of the X-series models made in Spartanburg. YTD through May the X3 was up 45.0%, the X4 was down 19.9%, the X5 was down 16.0% and the X6 was up 16.1%. Total U.S. sales through May 2016 39,286 compared to 37,891 same period 2015, up 3.7%. http://www.prnewswire.com/news-releases/bmw-group-us-reports-may-2016-sales-300278039.html
> 
> It's quite possible that worldwide sales of the X-series are up more than that but I didn't really search very hard. It's also possible that some of the potential X5 customers decided to switch to the X3 because maybe they couldn't find an available X5 in stock that they liked but they did find and X3. Remember, Americans are not like Europeans. Most of them are not willing to wait for an ordered car to come in. They want to drive home in one immediately to show all their friends and neighbors. Anyway, at least the X-series sales in the U.S. are up instead of down. Remember than U.S. sales of BMW brand are still down about 9% or so for the year compared to last year even though worldwide sales of BMW brand are up. So the rest of the world is making up for the slowdown in the U.S.


The post that I should have deleted has a link to the 16 June US sales.

X5s are down 46% from last year. X6s are down 60% 5ers sold 2,847 units down only 4% from last year but are pretty far off the E-class at about 4,300 units.

You are probably right about sales to the rest of the world eating at US supply though. But still, down 46% has to be significant to them right?

I am also sure that the new 5er coming out has something to do with the discounting on the '16s, the problem is they are still making them. I just got an email add from a BMW dealer in VA offering between $9.5k and $11k off on multiple 528s 535s, and I have seen people do better than ads, generally speaking of course.

edit: crap, its late, and I included numbers in my post...... oh well.


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## Ninong (May 20, 2014)

ddeliber said:


> ...why is the X5 doing so poorly right now? Same with the 5 series. It is interesting to me because BMW is discounting the hell out of the 5ers...





ddeliber said:


> X5s are down 46% from last year. X6s are down 60% 5ers sold 2,847 units down only 4% from last year but are pretty far off the E-class at about 4,300 units.
> 
> You are probably right about sales to the rest of the world eating at US supply though. But still, down 46% has to be significant to them right?
> 
> I am also sure that the new 5er coming out has something to do with the discounting on the '16s, the problem is they are still making them.


*Finally I can respond to your questions now that the worldwide sales through June have been published!*

BMW Group posted its best ever June in history! Forget about the U.S., BMW is doing great worldwide and having a record year! BMW Group was up 9.1% in June over last year and year-to-date sales were up 5.8% over the same period in 2015, and that includes having to absorb disappointing sales in the U.S.

*BMW brand vehicles posted the biggest increase in sales. In June alone, demand for BMW vehicles was up 9.7% over last June. The biggest seller was the 5-series* (29,965 up 5.4%), followed by the 2-series (21,720 up 49.6%) and the BMW X1 ((17,031 up 79.8%). http://www.bmwblog.com/2016/07/12/bmw-group-posts-best-ever-june-sales/

One more comment that doesn't appear in that article. The demand for the new BMW i3 with the 50% increase in battery capacity is strong. It hasn't even started production yet but there are already thousands of orders for it in Europe alone.

One more thing I have been pointing out for more than a year now: Mercedes is a good year or two ahead of BMW in their model change cycle and that has given them a distinct advantage but it may be temporary because BMW's new CLAR platform is years ahead of Mercedes. They're at least three or four years behind BMW in moving into that technology, although they may be a couple of years ahead of BMW in driverless technology -- something I'm sure no one of this forum looks forward to with much joy if they like driving themselves.


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## jjrandorin (May 8, 2013)

Ninong said:


> *Finally I can respond to your questions now that the worldwide sales through June have been published!*
> 
> BMW Group posted its best ever June in history! Forget about the U.S., BMW is doing great worldwide and having a record year! BMW Group was up 9.1% in June over last year and year-to-date sales were up 5.8% over the same period in 2015, and that includes having to absorb disappointing sales in the U.S.
> 
> ...


I think that some people may focusing (wrongly) on the fact that US sales are down as if this is some sort of doom and gloom thing for BMW. People tend to think the US is the center of the (consumer) universe, and we increasingly are not.


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## Ninong (May 20, 2014)

jjrandorin said:


> I think that some people may focusing (wrongly) on the fact that US sales are down as if this is some sort of doom and gloom thing for BMW. People tend to think the US is the center of the (consumer) universe, and we increasingly are not.


People often focus on different things from the same set of statistics. For example, here is a Bloomberg article that begins, "Mercedes-Benz solidified its sales lead over the BMW brand in the first half of the year..." Since I'm biased, I would have started it, "BMW beats both Mercedes-Benz and Audi in the month of June for the first time this year to reduce the lead held by Mercedes since the beginning of the year." All of the numbers are in that article to write it either way. Mercedes probably will hang on to beat BMW for the full year but the year isn't over yet. BMW has been Number One in the World in Luxury Car Sales for the past 11 years straight. Mercedes will pull out all the stops to retake the crown they used to have way back when.

I think it's more important to Dr. Z, head of Daimler, than anything else in his life. He came very close to being No. 1 in the World last year but BMW shocked him and held on to the title they took away from Mercedes 11 years ago. In the U.S. Mercedes came very close and they probably thought they would be No. 1 but they ended up being No. 3. Not only did BMW take No. 1 but Lexus took No. 2.

The Germans are hung up on titles more than Americans are. For example, have you ever noticed how they all use the title "Dr." in front of their name even though they are not a medical doctor. In the U.S. it is customary to not sign your name with the title "Dr." in front of your name unless you are a medical doctor or a dentist (DDS) or maybe even a DVM, but not if you're a PhD, or a DSc, or a DBA, or DNP, or any of the other doctorates. Those usually follow your name. In Germany if they have a doctorate in anything they begin their name with "Dr" and still add all the initials after, Dr.-Ing. (Doktor-Ingenieur) -- an engineering doctorate, is common with many BMW senior employees. Even Ian Robertson, BMW's worldwide head of sales, sticks "Dr." in front of his name even though his only doctorate is an honorary degree. He does have a masters in something, I forgot, but no doctorate. And he's not even German, he's British. He used to be the president of Rolls-Royce before he was promoted to the Board of Management as Vice President for Sales.

http://www.bloomberg.com/news/artic...mw-at-half-year-mark-in-luxury-car-sales-race


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## Ninong (May 20, 2014)

Let me put some more pro-BMW spin on the first half numbers released by BMW. I was very pleasantly surprised by those numbers, even though we haven't seen the profit numbers yet. I was expecting the Takata airbag debacle to have a noticeable negative impact but that doesn't appear to be the case. Brexit just happened June 23, so that affected just the final week of the first half. As far as market cap is concerned, yes there was a big sell-off for about 10 days following that misguided vote but most of that drop has been recovered over the past seven trading days. For example, Daimler fell 13% but is now up 9.5% from its post-Brexit bottom. BMW fell 12.6% but is now up 12.3% from that low. Both sets of figures are as of a few minutes ago on the U.S. market. I think the Conservative party's election of a pro-Remain party member to be Britain's new Prime Minister will lead to a much slower exit and who knows what might happen, provided Germany and France don't try to push them out the door faster. Scotland will almost certainly vote to split from the U.K. in order to remain in the E.U.

I think the vote in the U.K. was a protest vote and now even those people who voted in favor of Leave are having second thoughts about their choice. All those low-information voters are now complaining that nobody warned them this would happen and this is just the opposite of what they were promised. The same thing could happen in the U.S. if people decide to stay home and not vote in an important election. If they don't vote, or if they cast a "protest" vote, then they can't blame anybody else if things don't turn out the way they hoped. Some of the promises made by a major party's presumptive nominee are beyond absurd. Okay, enough of politics, everybody's knows which way I lean by now.  No matter which way you lean, you have a responsibility as a citizen to vote and to seriously consider the consequences of your vote.

BMW predicted that they would sell slightly more cars this year than last year, which was a record year, and they predicted that net profit would slightly increase. They also predicted that the second half of the year would be a little better than the first. They didn't say anything about remaining Number One in the World or Number One in the U.S., only that their total worldwide production would be slightly higher and so far they are certainly on track to fulfill that prediction. June was the best month ever for BMW brand and the first half of the year was also a new record for BMW brand as well as all of BMW Group. Mercedes is also doing very well this year and they might beat BMW in total sales worldwide for the first time in the past 11 years. They might beat BMW for Number One in the U.S., too. I guess that depends on how much better BMW does in the second half compared to the first.


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## Ninong (May 20, 2014)

Let's read between the lines of this pro-Mercedes Bloomberg article and simply lift out quotes exactly as they appear to highlight the points I want to make that contradict their headline. I will add my editorial comments in parentheses. I love doing this stuff because we already know which way they are biased from previous articles. 

Daimler Rises as *Profit Surprises* and *Mercedes Seals Sales Lead* (Translation: Profit on MB cars fell 1.1% and BMW beat them worldwide in June for the first time this year but they're still clinging to a YTD sales lead over BMW.)

...the company solidified its lead in the luxury car market (forgot to mention that BMW beat them in June) and said it's confident of reaching this year's underlying profit goals (in spite of profits going down at the Mercedes car division).

The result *excludes* almost 500 million euros in Takata Corp. air-bag recalls as well as 400 million euros for legal costs that Daimler didn't explain. (Other than that, Mrs. Lincoln, how did you enjoy the play?)

Locked in a race for luxury-market leader with BMW AG and Audi, Mercedes has been in the process of rejuvenating its fleet, including a new version of the business-focused E-Class sedan in March. (BMW is about 10 months behind them with the new 2017 G30 5-series.)

"The stronger than expected result was driven by the strong performance in the cars division," said Arndt Ellinghorst, a London-based analyst with Evercore ISI who has a *sell rating* on the shares.

*Adjusted ebit at the Mercedes-Benz Cars unit fell 1.1 percent... Mercedes adjusted the value of its inventory by 284 million euros in the period.* (Factory-to-dealer kickbacks on current inventory.)

The marque's sales jumped 12 percent this year through June to just over 1 million cars (actually 1,006,619) more than double the growth at Volkswagen AG's Audi, where deliveries rose 5.6 percent. BMW-brand sales rose 5.8 percent to 986,558 vehicles.

(BMW trails Mercedes by 20,062 at the end of June after trailing by 20,715 at the end of May. They beat Mercedes by only 653 cars in June but it was significant because it was the first time this year that BMW beat both Mercedes and Audi. BMW is currently ahead of Audi worldwide by 33,358 cars. Maybe Mercedes won't run away with it as expected? As of right now, BMW's sales equal 98% of Mercedes' sales and BMW has always said they expect the second half of the year to be better than the first.)



http://www.bloomberg.com/news/artic...uarterly-results-significantly-beat-estimates


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## rjc89 (Jul 18, 2016)

Hi guys, I've been lurking here for several weeks and I have to say, I've learned a ton from the stickies and everyone's helpful responses to threads. Thank you guys so much for sharing your knowledge - it's super valuable!

I have a few beginner questions - the last one is a little off-topic, so I understand if you can't answer:

1. Does anyone know what the July residual is for the 428i / 428i gran coupe?

2. I thought I read on this thread that the 328i residual is 66%, is that accurate?

3. When does BMW generally offer the best residuals/rebates/lease deals? I have a car and am not in a rush so i'm wondering what time of year is best to get the most bang for my buck. I would assume they get aggressive with deals on the 2016s when more of the 2017s start to arrive at dealerships in a few months, but I'm not sure.

4. Generally speaking, how do BMW residuals/lease deals/money factor compare to Mercedes? 

Sorry if #4 is too off-topic - I just ask because right now my top 3 options are the 328i, 428i (preferably gran coupe) or an MB C300. Like I mentioned I am in no rush - I have a current lease with Honda (that I have to get out of, but that's another story) and the car works fine. I haven't even started talking to dealers yet, I've just been absorbing tons of knowledge from this forum and saving up cash for a small down payment/MSDs. I will probably post a deal evaluation thread here when I start visiting dealers in the next few weeks. I'd rather wait an extra month and get a sweeter deal than rush into something.

Also if anyone has advice on/contacts at dealers in the Washington, DC/northern VA area, please let me know. If you are local i'd be happy to buy you a beer/lunch for your help! 

Thanks guys!


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## ZoomVT (May 30, 2008)

rjc89 said:


> 1. Does anyone know what the July residual is for the 428i / 428i gran coupe?
> 
> 2. I thought I read on this thread that the 328i residual is 66%, is that accurate?
> 
> ...


1. 63% for 36/10k for both

2. Correct, for 36/10k

3. It depends on the model and the release of the next year vehicle. It also depends in there is a new chassis or if its a lifecycle improvement. Although you can see better offers throughout the year - perhaps the most reliable time would be in Q4, November and/or December, as they fight with MB to be #1 in the US. But this wont apply to all vehicles, and they are most likely to focus on the high volume ones. There used to be a long standing thread where people would post the best deal available (on any BMW) any given month... it was pretty awesome to see some people snap up Z4s for like $200/mo with MSDs.

4. I have not shopped a MB in a while but I do know that BMW is very aggressive with their residuals. They are much more aggressive than most, but I dont know if MB has changed their tactics and are matching the same high residual -> CPO double dip game...


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## Yinzer (Jul 21, 2014)

Id say Benz incentives are about the same. 17 e class is 62% 36/10. MF is slightly higher but they offer up to 13 msd.


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## rjc89 (Jul 18, 2016)

Thank you Yinzer and ZoomVT for the awesome info! Like I said I haven't driven anything yet so I'm just going based on what i've read/watched - but it seems like the C is more in the vein of the traditional luxury sedan, while the 3 is made for a great driving experience. And I just love the sleek look of the 428, plus the hatch is cool. 

MSRPs on all 3 are within a few thousand (depending on packages obviously), so I think I just have to test drive all 3 and then look at the numbers - that's why I was asking about MB residuals/incentives. Appreciate the info!


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## LRISR (Jul 5, 2013)

rjc89 said:


> Hi guys, I've been lurking here for several weeks and I have to say, I've learned a ton from the stickies and everyone's helpful responses to threads. Thank you guys so much for sharing your knowledge - it's super valuable!
> 
> I have a few beginner questions - the last one is a little off-topic, so I understand if you can't answer:
> 
> ...


Sent you a pm.


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## Ninong (May 20, 2014)

rjc89 said:


> Hi guys, I've been lurking here for several weeks and I have to say, I've learned a ton from the stickies and everyone's helpful responses to threads. Thank you guys so much for sharing your knowledge - it's super valuable!
> 
> I have a few beginner questions - the last one is a little off-topic, so I understand if you can't answer:
> 
> ...


Usually BMW spends slightly more than Mercedes to help the dealers move the last model year's vehicles off the lot to make way for the incoming new models. The new 2017 BMW 330i and 430i went into production a couple of weeks ago.

The 36/10k residual for the 2017 330i is 60% and for the 2016 328i it's 6 points higher at 66%. For the 2017 430i it's 57% and for the 2016 428i it's 6 points higher at 63%. The money factor is the same for both the 2016 and 2017.

Generally speaking, with any manufacturer, you get what you pay for. If the current year's vehicle is selling for $5,000 less than its incoming replacement it's because it's worth $5,000 less than the brand new replacement. In other words, it's 12 months older and has depreciated in value. Customers who intend to lease may be more likely that those who intend to buy to look at this as a better deal for them because all they're really interested in is the monthly payment for the next 36 months. They don't want to own the car, they just want to rent it for three years.

So is now the best possible time to lease a new 2016? That all depends on your point of view. If you're willing to wait until November or December to lease a new 2016 BMW you will almost certain get a better deal but who knows what will be left in stock? They're not making any more of them. That ended in June. You can get a really good deal right now and choose from a larger selection of available cars. Pull the trigger now, meaning before the end of August, or wait a little longer? That's up to you. How much more might you save if you wait until November? Nobody can predict for sure but probably not more than $1,000 or so. A lot depends on whether the money factor goes up and that depends on the markets at the time. Will the Fed ever start raising rates like we expected them to do months ago? Well, we certainly didn't expect Brexit, did we, and neither did the Fed. It was an incredibly dumb move on the part of the Brits!

What about a new 2016 MB C300 right now? Well, we know from their website that the current residual for 36/10k is 62%. Their current finance rate is 2.99% for 24-72 months. Their lease acquisition fee is $795 vs $925 for BMWFS but their disposition fee is $595 vs $350 for BMWFS. The deal you get depends entirely on how well you negotiate with the MB dealer of your choice. MB's money factors are usually higher than BMW's money factors.

I don't know of any Bimmerfest sponsors in the immediate DC area but many Bimmerfesters have reported excellent results with dealers in your general area and maybe you can find something in the Dealer Feedback Forum. You're not in Haymarket, are you?


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## ZoomVT (May 30, 2008)

Yinzer said:


> Id say Benz incentives are about the same. 17 e class is 62% 36/10. MF is slightly higher but they offer up to 13 msd.


I didnt know this. 13 MSDs?

Do you have the details of how it works? Same as BMW? 
- Round up to the next $50 x # of MSDs?
- Whats the discount of MF per MSD?
- Is there a cap? BMW sets a minimum MF you cant go below


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## X5_XPRESS (Jul 15, 2016)

Accurate??

http://www.thetruthaboutcars.com/2016/07/bmw-usa-sales-fade-least-bmw-like-models-bright-spots/

Forget last year***8217;s record sales achievements in BMW USA***8217;s showrooms. Through the first six months of 2016, sales at the BMW Group***8217;s BMW brand are down 9 percent in the United States, a first-half pace which suggests BMW sales will fall to a three-year low even as the overall new vehicle market continues to grow.

Not only is BMW***8217;s car division off last year***8217;s pace by more than 20,000 sales, or 18 percent, the brand***8217;s three most costly utility vehicles ***8212; X4, X5, X6 ***8212; are down 22 percent. Yes, the overall car market is fading, but BMW***8217;s 22-percent car decline is far worse than the U.S. auto industry***8217;s 8-percent drop in car sales. And the 24-percent decrease in, for instance, sales of the BMW X5 stands in stark contrast to the 8-percent increase in the overall SUV/crossover market.

There are nevertheless bright lights in the BMW lineup.

Among passenger cars, the one car that most clearly exemplifies BMW***8217;s old Ultimate Driving Machine credo, the 2 Series, is the BMW car that***8217;s growing fastest. By far.

Among crossovers, the BMW which most flies in the face of everything the BMW cognoscenti value about BMW, the X1, is the BMW SAV division***8217;s fastest-growing vehicle. By far.

ENTRY-LEVEL JOBS
Combined U.S. sales of the BMW 2 Series and BMW X1 are up 88 percent through the first six months of 2016. One year ago, they earned less than 7 percent of BMW USA***8217;s volume. This year, the 2 Series and X1 produce nearly 14 percent of BMW***8217;s U.S. sales.

The 2 Series***8217; success comes as the majority of BMW***8217;s vast car lineup fades. Aside from the newly launched sixth-generation 7 Series (up 7 percent to 5,605 units year-to-date), the 2 Series is the exception to the declining car rule in BMW***8217;s showrooms. 3, 4, 5, 6, i3, i8, and Z4 volume is collectively down 24 percent, a significant loss worth 24,163 sales.

The 2 Series, however, is on pace for 22,000 sales in 2016 thanks to a 70-percent year-over-year increase through six months. The 2 Series and its 1 Series predecessor averaged 10,000 sales between 2008 and 2015 and peaked just north of 13,000 sales in 2010.

These aren***8217;t inconsequential numbers. The 2 Series is now outselling the Scion FR-S, Subaru BRZ, and Nissan 370Z combined; outsold the Volkswagen Golf GTI and Golf R combined in June; and easily outperformed the combined best efforts of the Alfa Romeo 4C, Audi TT, BMW Z4, Mercedes-Benz SLK, and Porsche Boxster/Cayman in the first-half of 2016.

Is the 2 Series the new 3 Series? Not quite. Though total 3 Series/4 Series volume is down 23 percent this year, the 2 Series***8217; bigger brethren are still outselling the 2 Series by nearly six-to-one. But the 2 Series is the rightful successor to the 3 Series of the ***8217;80s and ***8217;90s. While demand for more costly BMW cars fade, demand for this most BMW-esque of current BMWs is at an all-time high.

2016 BMW X1 white

MARKS THE SPOT
You still won***8217;t be shocked to discover that BMW USA nevertheless sells more X1s than 2 Series coupes and convertibles. Based on a front-wheel-drive architecture shared with BMW***8217;s Mini brand, the second-generation BMW X1 will, at its current rate of growth, report record annual U.S. sales volume by year***8217;s end.

A front-wheel-drive BMW isn***8217;t half as heretical to the typical X1 consumer as it is to the BMW aficionado who memorized the gear ratios of the E30 318i. Remember the story in 2010 that said the overwhelming majority of 1 Series owners didn***8217;t know their car was driven from the rear? It seems highly unlikely that those buyers will care about the origins of their vehicle***8217;s architecture, particularly when the overwhelming majority of X1 buyers opt for four driven wheels.

Compared with the first-half of 2015, X1 sales in 2016 have more than doubled to 12,139 units. Although the X4, X5, and X6 are all failing to match last year***8217;s volume, the X1 isn***8217;t alone in its BMW SAV gains. The BMW X3 has produce a substantial 49-percent gain and is likely to end the year with its highest-ever U.S. sales output.

DIFFERENT STROKES
Other than base prices, which differ by only $50, the BMW 2 Series and BMW X1 are strikingly different vehicles. One represents the BMW of the past, a BMW focused on driving and dynamics and performance. The other is at the heart of BMW***8217;s future: affordable practicality with enough BMW trappings and suggestions of performance to bring together a buyer***8217;s BMW***8217;s aspirations with his need of useable space.

Outside of these two models, BMW USA lost 25,000 sales in the first-half of 2016.

The 2 Series and X1, the most BMW-like and least BMW-like models in the BMW brand***8217;s lineup and the two BMWs with the lowest base prices, added 10,000 sales.


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## rjc89 (Jul 18, 2016)

Ninong, thanks so much for your post. I need to read it over a few more times to absorb, but you are right, it just depends on what I want to do. I am thinking if I spend another 4-5 weeks saving, researching, and talking to dealers towards the end of that period, that will put me in a sweet spot of having enough cash on hand (though I don't want to put a lot down on a lease), information, and competitive deals/plenty of 2016 cars still available. I'm about an hour away from Haymarket, in east Fairfax County.



ZoomVT said:


> I didnt know this. 13 MSDs?
> 
> Do you have the details of how it works? Same as BMW?
> - Round up to the next $50 x # of MSDs?
> ...


I was wondering about this too - there has to be some cap that Mercedes sets, or maybe they just do a smaller increment than the .00007 per MSD that BMW takes off?


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## Ninong (May 20, 2014)

X5_XPRESS said:


> Accurate??
> 
> http://www.thetruthaboutcars.com/2016/07/bmw-usa-sales-fade-least-bmw-like-models-bright-spots/


So this Timothy Cain guy, whoever he is, is a self-appointed expert on all things automotive and he runs his own website called "The Truth About Cars." Well, whatever sells, right? 

How about this version of the truth, which is based on actual BMW Group official announcements.

*BMW Group Reports June Sales Rose 9% Year-Over-Year!*

Sales of BMW Group set a new June record with a total of 227,849 vehicles delivered to customers around the world, an increase of 9.1% on the same month last year.

The latest record month means the company has achieved its best ever first half-year sales: year-to-date deliveries are 5.8% up on the same period last year with a total of 1,163,139 vehicles sold.

_Yeah, but what about BMW brand? This Timothy Cain dude is complaining about BMW brand vehicles. I bet they didn't go up 9.1% in June, did they?_

No, they didn't. As a matter of fact, *BMW brand vehicles were up 9.7% in June at 189,097, bringing year-to-date sales of BMW brand vehicles to another new record of 986,557, an increase of 5.8% over the first six months of last year.*

According to statements made earlier this year by Ludwig Willisch, president of BMW of North America, one of the things holding back sales of the X5's and X3's in the U.S. was availability of product. Don't forget, Spartanburg ships about 70% of its production overseas. The X-series vehicles accounted for 33% of BMW's U.S. sales in 2015 and that percentage is predicted to increase to 40% this year. Unfortunately production capacity lags demand.

Just another perspective on things. Of course, if your view is U.S.-centric, you may not care about such things. U.S. sales of BMW's were down again last month. I believe it was a drop of 9%-10% over last year, but guess what? It was still enough that BMW managed to outsell both Mercedes and Audi in the month of June in the United States. Just another view based entirely on official figures.


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## Ninong (May 20, 2014)

rjc89 said:


> ... (though I don't want to put a lot down on a lease)...


There is no need to put anything down on a lease except the first payment. Everything else can be rolled into the cap cost. If you total the car six months later, your entire balance will be covered by the GAP insurance anyway. Take the money you intended to put down and stick it in a separate account and then pull out a hundred or so every month to help cover your lease payment if it makes you feel like the payment is lower.

On the other hand, I really think everyone should pay the $925 lease acquisition fee, the dealer's "doc fee" (plus tax on those two fees), DMV fees and the first payment as part of the drive-offs. I'm not a big fan of MSDs but I understand why some people like them.


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## ZoomVT (May 30, 2008)

Ninong said:


> I'm not a big fan of MSDs but I understand why some people like them.


Out of curiosity, whats your thought against MSDs? Is there an unknown risk?


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## Ninong (May 20, 2014)

ZoomVT said:


> Out of curiosity, whats your thought against MSDs? Is there an unknown risk?


The only so-called risk might be that some BMW dealerships, for unknown reasons of their own, refuse to give you credit for the MSDs on your old lease against your new lease and will tell you they will come back to you in the form of a check from BMWFS later (usually 3-6 weeks later).

There should be no risk of losing the MSDs as long as the contract is not in default. As the name implies, a *security* deposit, or deposits, would be forfeited in the event of default. In the event the vehicle is totaled, the MSDs should have no effect on the balance owed on the contract that would be covered by the GAP insurance. In the event you personally call for a payoff (how much do I have to send you to pay off my account right now?), they would usually tell you the amount you owe after crediting your security deposit(s) to the payoff.

By putting up unrequired security deposits, you are tying up money for the next 36 months that could have been employed elsewhere. It's your call one way or the other. There was a time when multiple security deposits (usually four of them) were often a condition of BMWFS' approval of a lease app that they considered slightly marginal. It gave them a little extra margin of safety against loss in the event of default. It also smoked out any applicant who might have been stretching just to come up with the minimum required for the drive-offs.


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## ZoomVT (May 30, 2008)

"Tying up money" is one way to see it, except that it's not being tied up; it's being deployed to generate a return that's it's arguably better than you can get anywhere given the risk profile. 

I'm still not sure why you are not a fan of them...

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## Ninong (May 20, 2014)

ZoomVT said:


> "Tying up money" is one way to see it, except that it's not being tied up; it's being deployed to generate a return that's it's arguably better than you can get anywhere given the risk profile.
> 
> I'm still not sure why you are not a fan of them...


They are absolutely tied up for the term of the lease. It's not just a way to see it, it's a factually accurate statement of facts.

Of course, I understand the rate of return, which is why I said it's "your call." I have always been a fan of paying exactly what I said in my comment: the BMWFS required lease acquisition fee, your dealer's "doc fee" -- no matter how ridiculous it might be, plus tax on those two unofficial fees, plus the actual official fees (DMV fees) and the first monthly payment, and nothing else.

That's what I am a fan of doing. You're probably a fan of multiple security deposits. Your call.


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## ZoomVT (May 30, 2008)

Fair enough... 

It was more about me hoping to learn something new from you. 

Didn't mean to make this a msd vs no msd. 



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## Ninong (May 20, 2014)

ZoomVT said:


> It was more about me hoping to learn something new from you.


Most of the really "new" stuff in leasing happened before BMW got into the game by starting up their own captive finance arm. It moved from something strictly offered to small businesses and a few professionals to something advertised to the general public in the mid-1960's, around the time of the Truth in Lending Act but before it was extended to full-disclosure leases. Was it a reaction to TILA's rules for fully disclosed finance contracts, that came years before full-disclosure leases? Or was it just another way to lower monthly payments so that they could raise the selling prices of cars? Or both?

When I started, the longest finance term was 36 months and the usual down payment was 20%. Then they introduced 42-month finance terms. Then a few banks and Credit Unions in Denver started offering 48-month contracts. GMAC and FMC didn't like that idea because they thought it kept their customers out of the market too long. Then somebody must have asked, "Hey, why not leases? And besides, they're not disclosed."

So then somebody in DC decided to make leases fully disclosed. They had already made finance contracts fully-disclosed and mandated the switch from add-on interest (the only method used for car loans by dealerships, banks or credit unions up until then) to APRs, so now they figured it was time to make sure leases were fully disclosed. We had three lease specialists in our leasing department at the time (which was kept separate from the rest of the sales department) and they thought that would be the death of them. Well, sort of because right around that time we integrated our leasing department with the rest of our sales department (this was a GM dealership, not a BMW dealership). BMW dealerships at that time were few and far between and tiny if you found one on the East Coast or the West Coast.

Before long, sometime in the late 1960's to the early 1970's, leasing went mainstream and finance contracts jumped from 48 months to 60 months within a couple of years of each other. Then in the late 1970's and early 1980's we were fighting absurdly high interest rates. Rates so high not many dealers could afford to floor anything more than, at most, half their usual inventory. The Prime Rate was above 20% at that time.

When I joined a BMW dealership in the mid-1980's, we used GECC as our manufacturer's suggested finance source but we also used Bank of America, Wells-Fargo, Chase and at least two or three local/regional banks that were great for customers with FICO scores below 700. Yes, at one time 700 was the FICO score BMW considered the minimum for what is now known as Tier 1 credit. Actually, I'm jumping ahead of myself. We didn't get to the part where BMW formed a partnership with GECC to form BMWCC, which was run by GECC from their Barrington, Illinois headquarters.

Even when it was called BMWCC, GECC was still running the show and BMW I think was sort of learning the ropes so to speak. So everything was done the usual bank way based on common sense. Cars didn't really go up in value as they aged, so why should their residuals? KBB came out every other month and the banks, including GECC and then BMWCC, put out a new residual/lease program every other month. We looked to see if they stayed the same or went down and hoped that they didn't drop by too much and hoped the money factors didn't get any higher than they already were.

Then around 1992 BMW bought out GECC and renamed themselves BMWFS and moved from Barrington, Illinois to Hilliard, Ohio. A few of the same guys from Barrington stayed with them and just changed their employer's name to BMWFS and their new home address to Ohio. That was when things started to get interesting. Not as interesting as they are now, but interesting compared to years past.

Once certain luxury import car manufacturers started playing games with their lease offerings, the other luxury import car manufacturers were forced to start their own captive finance arms in order to keep up. That's how they all got into this game of using leases, lease money factors and residuals as a marketing ploy to talk people into buying (actually leasing) cars that they otherwise wouldn't be able to afford. That doesn't apply to all BMW customers but it does expand the pool of available customers a lot more than it would be without leasing penetration being what it is today. And it convinces people that they can afford a $70,000 car or a $100,000 car that they wouldn't have even considered if they were buying it on a 60-month finance contract.

It's how BMWNA went from selling 85,000 cars a year 30 years ago to four times that many today. And it what got them into the used car business. So all of that is new and that's a lot of new.


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