RE: [BMWMc] Re: Losing Another BMW Dealer

["Jim" <jimdshaw@xxxxxxxxxxx>]

I haven't heard of any more recent change from the Spanish
guy heading BMW NA. As a European manufacturer, BMW has a
special problem: the value of the US dollar has dropped by
30-35% compared to the Euro from just three or four years
ago. BMW's costs are in Euros - selling in America brings
them lowered value dollars, so there's a profit crunch. I
wouldn't be surprised if NA is just breaking even in the USA
with the higher prices to dealers, raised MSRPs, fewer demo
bikes, etc. It's also a contributing factor in all the new
models BMW has introduced in the last two years. It's had to
maintain sales while trying to raise prices 35% when they're
selling, if they don't change, that same model motorcycle as
three years ago. The new models appear to (and maybe even
do) offer more value, helping justify price increases that
are really mostly to overcome the dollar value problem.

I guess I'd put a bean counter in NA as well, when the
problem is financial. Businessmen know that every buck they
save shows up 100% in the bottom line, while increasing
sales dollars affects the financials only by the net-net
profit margin %.

Of course, the trouble is, in cutting costs you start to
affect the service to your owners - like you and me, for
example. Dealer closings are one result. Eventually, you run
the risk of losing your market enough to offset your
financial gains by cost cuts. But when your costs are in
Euros, your prices here are in US$, and the US Government
spends beyond their means, multinationals like BMW have to
do this fast juggling act with cost vs. a slower reacting
market. It's just another way we Americans lose out when our
government and economy does stuff that lowers the value of
the dollar. (Please take that discussion elsewhere.) You
might learn more here and elsewhere:
<http://www.economist.com/finance/displaystory.cfm?story_id=
3445928&no_na_tran=1>

I haven't tracked the Yen vs. the Dollar, but I believe that
a similar change happened also. For example, we are now
seeing the MSRP of the Yamaha FJR1300 climb to US$14,000
(with some upgrades), up from about US$11,000 a year ago.
Harley should have clear sailing under these circumstances,
but are raising prices to cover the cost of imported parts.

As a very smart guy said many years ago: "Stand still,
little sheep, to be sheared."

Jim Shaw
Hinckley, Ohio USA
'01 R1150GS


- -----Original Message-----
From: bmwmc-bounces@xxxxxxxxxxxxxxx
[mailto:bmwmc-bounces@xxxxxxxxxxxxxxx]On Behalf Of
PGK75S@xxxxxxx
Sent: Monday, December 26, 2005 12:37 PM
To: oilheads@xxxxxxxxx; bmwmc@xxxxxxxxxxxxxxx
Subject: [BMWMc] Re: Losing Another BMW Dealer


In a message dated 12/26/05 4:00:59 AM Eastern Standard
Time,
rwmunday@xxxxxxxx writes:

<<  The factory's 4th president in 4 years is a bean
 counter, not a bike person (ala Roger Smith at GM).  As
such, they made a
 corporate decision to raise the company's profitability at
the expense of
 the dealers (and by default, current owners as well). >>




Anyone know if this president is the Brasilian who arrived
via the motorcycle
division in Spain or is there yet another?

Paul
NJ
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