Last post on May 30, 2007 at 9:05 PM
You are in the Sedans
What is this discussion about?
BMW 3 Series, BMW 5 Series, BMW 7 Series
#325 of 729 Re: New 545 owner [rich545]
Jul 21, 2004 (6:20 am)
Just for simplicity's sake here's an interesting way to look at this from a sales prespective. The 2,102 more new 5 series cars they sold probably represents about an $105,050,000.00 (I used and average price of $50,000) increase in gross sales over 2003 5's. And that's only as of May! I realize that isn't real accounting, but it certainly shows that BMW isn't crying about the new designs. Think about that for the entire year. I bet they'll end up selling about 5000 more new 5's this year than last. Using the $50,000 average price that I used above that's an increase in sales of $250M for 2004. Keep in mind also that January through May are probably the slowest sales months, and that they had and still have very limited stock of the new 5's (trust me, it was really hard to find the 545 I wanted). I know, get a life rather than posting all of these figures! I just think that it's important to separate personal feelings from business facts. Sure BMW would love to have everyone the owns an old 5 come back for a new one, but realistically as long as sales are meeting their projections (which none of us knows for sure) they really don't care.
#326 of 729 Impact of New Design: Sales Data E60 Not A Huge Hit
Jul 21, 2004 (7:12 am)
Using the sales figures from the October 2004 issue of Bimmer magazine, covering YTD thru May:
E60 525i sedan= 7081
E39 525i sedan= 6699
This is a small increase of only 382 units or only 5.7% increase.
E60 530i sedan= 8124
E39 530i sedan= 8082
This is an even smaller increase of only 42 units or a miniscule .5% increase.
E60 545i sedan= 3773
E39 540i sedan= 2113
This is a substantial 1660 unit increase or a huge 79% increase.
E60 sedan= 18996
E39 sedan= 16894
This is an increase of 2101 units or 12.4%.
BUT... Keep in mind that the E39 came out in CY1996 as a MY1997. So the E39 sales data from CY2003 comes at the end of its lifecycle. The E60 sales data comes at the start of its lifecycle, when it is making the biggest "splash" in the market and minds of consumers.
Would be interesting to see the following:
- What were BMW's internal sales projections?
- How much did BMW spend on research and development of the E60 and what incremental increase in costs to put it into production?
- What are the E60's marketing costs?
- Is BMW using incentives to move E60s?
- How much did it cost BMW per unit to produce E39 and E60? Does the E60 cost more to produce per unit?
#327 of 729 Re: Impact of New Design: Sales Data E60 Not A Huge Hit [riez]
Jul 21, 2004 (7:36 am)
Looks like we're using the same chart. I agree that it would be interesting to see what BMW's projections are, but we're most likely never going to know that. One thing you forgot to mention though was that BMW was also giving great deals on the 2003 E39 at the end of it's lifecycle to move it so that probably ramped up sales of it right at the end a bit. Also, would you agree that January through May is the slowest time sales-wise for cars? I don't know about you, but that's the time that I'm least likely to buy a car. It's the beginning of the model year still, I don't want to buy a new car in the dead of winter, and you're probably least likely to get a good deal then. Most people buy cars in the spring, summer and fall. So it would be interesting to see what sales are like May through year-end. Not sure what BMW's fiscal year is though. In all, I'm not saying it's a hugely successful launch of a new design, but then I don't work in the car industry so I don't know what would qualify when you're talking about very expensive cars. What I do know is this, just about any company out there would take a 12.4% increase in sales during their slowest period in a down economy. Hardly a failure. But as you said, there are other unknown costs to consider. Who knows how much money BMW has made (or lost) really. All that I'm getting at is that people assume sales are down when in fact they are not at least as of May.
#328 of 729 Re: New 545 owner [rich545]
Jul 21, 2004 (10:44 am)
Rich, I did not see the chart wrong. I was comparing TOTAL E39 vs E60 numbers since the focus is on the exterior styling which is common across all the models (525, 530, 54x etc.). I feel that the total number is a good indicator of the appeal of the design. The fact that the higher end models sold better actually highlights my case about the pent-up demand.
The higher-end cars are bought by people who are not price sensitive but more brand loyal. This may be because of the enthusiast factor or the brand image factor. These folks were waiting for the redesign and ordered it as soon as they were available. They want the "best" BMW and nothing else.
It is marginal buyer, who is considering multiple cars who will actually determine the success of the model-line. The marginal buyer will cross-shop and also focus on price. This is the segment that which will form the bulk of the 525 and some of the 530 buyers. The drop(or flatlining) in sales here, especially of the 525, is an indication of the problem. Once the pent-up demand and the novelty of the new design wears of, the E60 will have to compete against other cars. I am not too optimistic about that.
One may have argued that the E60 models were released in a staggered manner, and hence, the year to year comparisons are not kosher. However, the May numbers, when all the models were in general availability tend to discredit that concern.
Finally, I think the economy is doing much better than last year's doldrums. The typical 5 series buyer is in middle management or higher (30 years +). These folks did well last year; last year's Wall Street bonuses were the best in a few years. Many folks also made a killing in the stock market last year and have more money to spend now than last year.
reiz: I think there was a $1000 incentive around for the E60, though I am not sure.
Jul 21, 2004 (11:27 am)
still looking at the sales figures, i agree that the new 5er isnt doing that well.
most people dont usually bother to buy something thats at the end of its lifecycle, in this case the e39, they prefer to wait a year or less for a newer model, yet the sales isnt doing that great, even with better economical situations.
to me it already proves just how well the e60 will sell.
Jul 21, 2004 (11:43 am)
I'd agree with that appraisal.
I think anniversarying YTD sales from last year doesn't tell the whole story. For one thing we have departing model, and as soon as new model particulars make the scene, a current lame duck begins to slow, usually.
Better might be to compare the OA sales boost percentage YTD for the E60 against the first-year sales boost percentage for the E39 ('98?), if such figures are available.
I would imagine this new model is relatively flat when all is said and done. I suggest it has alienated about the same number as it has converted (retensions valuing at zero in the equation)...
#331 of 729 Re: [wale_bate1]
Jul 21, 2004 (3:21 pm)
Well, I guess we'll just have to wait and see until more sales figures are available for this year. Until then the best anyone can do is speculate on who buys what when or what indicates good or bad sales numbers. Early next year we should know for sure. All I was saying is that sales are not in fact lower given that 2101 more units had sold so far. As for the reasons for that, everyone has an opinion. As far as the car itself goes, it's one of those love it or hate it things. I certainly wouldn't try to convince anyone that hates it to buy it; in fact it really only matters that I like it to me. Vsaxena-Sorry, probably shouldn't have said you looked at the chart wrong. What I meant was that since the station wagon and M5 are not yet available the total 2003 5 sales can't be accurately compared to 2004 until you delete the station wagons and M5 from the 2003 numbers. I would also say that we won't really know whether this redesign was a success or failure until years down the road (no pun intended).
Jul 21, 2004 (3:28 pm)
No two ways you are correct about the appeal.
I'm quite certain it's an engaging and satisfying drive, and if the outside speaks to you, well, that's all she wrote!
I lusted seriously after the '02-03 E39, and for me, this gen isn't a step forward in styling. But that's my own deal!
I don't really think there's a mfr out ther right now with a real solid handle on styling, other, maybe, than Mazda. To some extent Aston as well, I guess.
Everybody seems to be casting about for the next big wave to ride, and I don't see anyone who's really caught it!
Jul 30, 2004 (12:04 am)
I agree that the new e60's sales aren't impressive considering that it's a new model.
However, in addition to the e60 style being a little strange and offputting to many potential buyers, there are 2 other factors that might have led to lower sales: 1) sales of X5, lots of people are taking an SUV over a car; and 2) increased prices on e60.
IMO, the increase in prices is the main reason sales of e60 have declined, then the strange looks and lastly the X5 is cannibalizing some 5-series sales.
I'm seeing more e60s on the road now and IMO, it's the strangest looking car I've ever seen. I like some of the individual design elements a lot, they're very creative and well done.
But there's too many design elements and they don't work well together, instead they're competing for your attention. I haven't seen any other car that looks so different in different colors, and I think this is the result of too many contrasting styling elements.
Jul 30, 2004 (6:58 am)
There are lots of E60s in my neck of the woods and I like the vehicle more and more. As a contrast, while I have only slightly warmed up to the G35/Nissan styling after two years, after a few months the new Bangle version of the 5 series have grown on me tremendously. Can't wait for the unveiling of the new 3-series.
I think in the long run, once they tweak the overall design it'll be awesome.