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      08-21-2008, 09:12 AM   #1
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Price increase

I saw HERE the X6 3.5 is going up $3,000 MSRP for 09 models and $3200 for the 5.0.

Does this mean sales are better than expected? Seems like a large jump.

Also heard the 335 is losing logic 7 as standard equipment.

BMW is tightening the belt. I would not be surprised if the new iDrive system went up another $1000 or more.
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      08-21-2008, 10:32 AM   #2
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I saw that at another blog also, I figured BMW thinks that the folks having to wait for the 2009 model will be happy to be able to get one so "we can stick it to them" for another $3k.

Maybe I'm being cynical and there will be more included as standard equipment.
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      08-21-2008, 10:35 AM   #3
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Quote:
Originally Posted by chuck92103 View Post
I saw on another forum the X6 3.5 is going up $3,000 MSRP for 09 models and $3200 for the 5.0.

Does this mean sales are better than expected? Seems like a large jump.

Also heard the 335 is losing logic 7 as standard equipment.

BMW is tightening the belt. I would not be surprised if the new iDrive system went up another $1000 or more.
I talked w/ a BMW person who works at the Plant during The Hydrogen Road Tour this past weekend.He said first full year X6 sales are tracking at 30,000+/- units and 70% of those sales are overseas (non US) sales.The 30k sales number is slightly above to about right where BMW thought sales would land.Given the worldwide economic slowdown we are all experiencing and $3-$4 gas....BMW is very happy with X6 sales.Thanks! PalBay
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      08-21-2008, 10:58 AM   #4
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Originally Posted by dmlgc View Post
I saw that at another blog also, I figured BMW thinks that the folks having to wait for the 2009 model will be happy to be able to get one so "we can stick it to them" for another $3k.

Maybe I'm being cynical and there will be more included as standard equipment.
Lets hope so. That is a big jump. Maybe they are finally including standard the rear camera and comfort-access entry - 2 options that should be standard on a luxury vehicle in this price range.
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      08-21-2008, 01:01 PM   #5
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Originally Posted by Elevated View Post
Lets hope so. That is a big jump. Maybe they are finally including standard the rear camera and comfort-access entry - 2 options that should be standard on a luxury vehicle in this price range.
Don't hold your breath, I can't see them altering the world web site price structure just for an increase in purchase pricing.
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      08-21-2008, 01:29 PM   #6
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Quote:
Originally Posted by Palbay View Post
I talked w/ a BMW person who works at the Plant during The Hydrogen Road Tour this past weekend.He said first full year X6 sales are tracking at 30,000+/- units and 70% of those sales are overseas (non US) sales.The 30k sales number is slightly above to about right where BMW thought sales would land.Given the worldwide economic slowdown we are all experiencing and $3-$4 gas....BMW is very happy with X6 sales.Thanks! PalBay
They were supposed to build 40k units the first year. 20k for U.S. and 20k for overseas markets.

If overseas is already at 30k units, holy smokes, This might be a run away hit like the X5. They expected to sell 100k X5's over 5 years, They sold 100k the first year of production.

If BMW does not have capacity I see why raising the price $3k to make a little more margin makes sense.
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      08-21-2008, 03:38 PM   #7
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BMW are trying to raise prices across the board. They took a bath last year on residual values of leases and they have been really hard hit by the huge drop in the value of the US dollar. Their profits last year were the lowest in over a decade. I'm guessing they are also pretty inefficient -- they have been on a roll for 15 years with essentially the same management team, which any MBA student can tell you almost always leads to a lot of fat in the system. The only way they will reverse any of the increases will be if sales drop in response. If that happens, expect a bunch of incentives like cheap leases rather than outright MSRP drops. The high early sales of the X6 are no indicator: almost every new model sells well at first to all us early adopters. It is the second and subsequent years that tell the real story.
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      08-22-2008, 10:35 AM   #8
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Originally Posted by Suzie's Dad View Post
BMW are trying to raise prices across the board. They took a bath last year on residual values of leases and they have been really hard hit by the huge drop in the value of the US dollar. Their profits last year were the lowest in over a decade. I'm guessing they are also pretty inefficient -- they have been on a roll for 15 years with essentially the same management team, which any MBA student can tell you almost always leads to a lot of fat in the system. The only way they will reverse any of the increases will be if sales drop in response. If that happens, expect a bunch of incentives like cheap leases rather than outright MSRP drops. The high early sales of the X6 are no indicator: almost every new model sells well at first to all us early adopters. It is the second and subsequent years that tell the real story.
IMHO
The problem with most management teams is too many freshly minted MBA students and not enough people that actually know anything about the business their in.

I think the lease business is dead for a few years. I suspect BMW to use the same sales model as they did with the X6, create a lot of hype then produce units slowly so there are waits. This will give the appearance of "exclusive" to the brand.

Last edited by dmlgc; 08-22-2008 at 11:29 AM..
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      08-22-2008, 12:59 PM   #9
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Originally Posted by dmlgc View Post
IMHO
The problem with most management teams is too many freshly minted MBA students and not enough people that actually know anything about the business their in.

I think the lease business is dead for a few years. I suspect BMW to use the same sales model as they did with the X6, create a lot of hype then produce units slowly so there are waits. This will give the appearance of "exclusive" to the brand.
+1 Cut production 10-20%, raise prices 10-20%, make just as much money with fewer cars.

No sense over producing and then cutting prices and having redidulous lease incentives.
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      08-22-2008, 04:39 PM   #10
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Quote:
Originally Posted by dmlgc View Post
IMHO
The problem with most management teams is too many freshly minted MBA students and not enough people that actually know anything about the business their in.

I think the lease business is dead for a few years. I suspect BMW to use the same sales model as they did with the X6, create a lot of hype then produce units slowly so there are waits. This will give the appearance of "exclusive" to the brand.
I certainly agree that newly minted MBAs allowed to run free are bad news. But almost any management team will, in time, stagnate and allow inefficiencies to creep in. I have run two companies, one of them with over 500 people. It never mattered how much I swore I would keep things lean and mean, there was always justification for just one more staff member... and then just one more... and so on, until before you know it you have a bunch of fat that can be cut with little or no negative impact on the organization. Much as I admire BMW as a well-run company, I am sure they are not immune to this.

I agree with you about leasing. I shouldn't have said we'd see lease deals, but rather things like very-low-interest finance deals for purchasing the cars. That way, BMW doesn't have to commit to a residual value. Of course, we won't even see good finance deals if BMW sells everything they produce, but I wonder how likely that is considering over half of all BMWs are traditionally leased, and while BMW is raising prices, Mercedes, Lexus, Infiniti, Porsche, and Cadillac are lowering theirs -- at least, that's what is happening here in Canada. At some point the market will tell BMW exactly how much premium people are prepared to pay for that blue propellor.

An X6 50i configured the way I want it is slightly north of 100 grand up here in Nanny Land. I can buy a whole lot of very desirable vehicles for that money. If BMW Canada raises prices still further, I'm not sure how much extra I am prepared to pay, no matter how much I like the car.
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      08-22-2008, 04:47 PM   #11
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Quote:
Originally Posted by Suzie's Dad View Post
I certainly agree that newly minted MBAs allowed to run free are bad news. But almost any management team will, in time, stagnate and allow inefficiencies to creep in. I have run two companies, one of them with over 500 people. It never mattered how much I swore I would keep things lean and mean, there was always justification for just one more staff member... and then just one more... and so on, until before you know it you have a bunch of fat that can be cut with little or no negative impact on the organization. Much as I admire BMW as a well-run company, I am sure they are not immune to this.

I agree with you about leasing. I shouldn't have said we'd see lease deals, but rather things like very-low-interest finance deals for purchasing the cars. That way, BMW doesn't have to commit to a residual value. Of course, we won't even see good finance deals if BMW sells everything they produce, but I wonder how likely that is considering over half of all BMWs are traditionally leased, and while BMW is raising prices, Mercedes, Lexus, Infiniti, Porsche, and Cadillac are lowering theirs -- at least, that's what is happening here in Canada. At some point the market will tell BMW exactly how much premium people are prepared to pay for that blue propellor.

An X6 50i configured the way I want it is slightly north of 100 grand up here in Nanny Land. I can buy a whole lot of very desirable vehicles for that money. If BMW Canada raises prices still further, I'm not sure how much extra I am prepared to pay, no matter how much I like the car.

Cars are never priced more than people are willing to pay. The price always drops to meet demand.
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