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Buoyant BMW retailers told to 'invest heavily'

BMW GB dealers are gearing up for growth as the carmaker prepares to build on record sales this year by setting ambitious sales targets for 2003. Buoyed by strong demand for the 3-series and X5, both up 15 per cent year-on-year, and the 7-series, up 11 per cent despite a limited range, BMW predicts sales of 86,000 units this year, compared to 81,720 in 2001.

Next year it wants to hit 90,000 on the back of new models like the 5-series, 6-series and variants like the 730d and diesel Mini.

The Mini, in particular, has been a “runaway success”, according to Jim O'Donnell, BMW GB managing director.

BMW initially expected to sell 25,000 Minis this year, but is now confident of reaching 35,000, rising to 37,000 in 2003. Market penetration is 1.3 per cent – ahead of 14 full line brands.

The dealer network is enjoying strong profits, with customers buying around £2000 of options on each Mini purchase. But retailers will be expected to “invest heavily” in larger premises over the next few years, as new variants, including next year a diesel version, are launched.

In return they will receive assurances from BMW that it has no plans to open its own outlets. BMW also wants dealers to focus on used car sales after overhauling the approved programme last year. Sales this year are up by 12.6 per cent and BMW is looking for further growth in 2003.

“It's a valuable profit stream for our dealers and it also helps to maintain high residual values, which are the cornerstone of our business,” says O'Donnell. “High residuals mean lower ownership costs and higher customer loyalty.”

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