Report: BMW Inflating Sales Numbers By Giving Dealers Big Discounts

BMW is determined to dethrone Mercedes-Benz as the best-selling luxury marque in the U.S. It may be going to extreme lengths to do so, too, according to a new report from The Wall Street Journal.

BMW and Mercedes-Benz have been battling it out this year for the title of the top-selling luxury automaker in the U.S. As of the end of last month, BMW crept ahead of its rival from Stuttgart, but only by a slim 1985-unit margin. (BMW sold 21,297 cars to Mercedes' 19,312.)

According to The WSJ, BMW made a one-day offer to its dealers – a $7000 discount on any 2012 model bought on July 31, 2012 as long as it was marked as sold in the company's records. It's suspected that many of the not-quite-2000 cars sold to take the sales lead were bought by dealers as demo or loaner cars and have not actually made it into the hands of customers.

The increased sales of demo vehicles could account for the large percentage jumps some BMW models made from July to August – The WSJ cites that 7 Series sales tripled from July to August (1696 versus 539) and the 3 Series coupe (a car with a $3200 demo discount) doubled from 1222 to 2555 sold. Deep discounts this time of year aren't rare in the auto industry either, as dealers see next year's models trickling in and attempt to clear out 2012 inventory, which could have attested for the 3 and 7's big gains.

BMW wouldn't cite how long it requires dealers to keep demo vehicles before selling them – most automakers require the dealer to hold onto them for a number of months before reselling them as used cars. BMW also recently announced a New York-based rental program; large, discounted sales to fleets are a tactic the American Big Three automakers have long used to help prop up their respective sales numbers. Both BMW and Mercedes have also recently started selling vehicles to rental service ZipCar.

The WSJ points out this isn't the first time we've seen inflated sales numbers in the race to top the luxury segment. In the late 1990's, Cadillac admitted to buying cars from its dealers to take the lead from Lincoln as the top-selling luxury brand in the U.S.

Thus far in 2012, Mercedes-Benz has sold 159,391 vehicles through the first seven months, and BMW has moved 147,801. Last year, Mercedes edged out BMW selling 261,769 vehicles to the Munich-based automaker's 247,907. With five months still left in the year, it's anyone's race.

Source: The Wall Street Journal (Subscription required)

johnny.5sp
Yeah and...look I kinda remember Detroit doing stuff like this too years ago. If you ask me this is a good deal for the Bimmer crowd!

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