[LDT]

Curious......last year was a changeover pre to post LCI for the X5 which, in my mind, was as close as you can get to a complete re-design without actually being a re-design. What is the historical data on sales in a re-design/refresh year?? I know that some buyers will not buy a vehicle in it's first year of a newly designed model.

[TurtleBoy]

Originally Posted by LDT

Curious......last year was a changeover pre to post LCI for the X5 which, in my mind, was as close as you can get to a complete re-design without actually being a re-design. What is the historical data on sales in a re-design/refresh year?? I know that some buyers will not buy a vehicle in it's first year of a newly designed model.

I think sales historically increase in a new or redesign year. Looking at the past for the X5, when the new generation came out the sales increased. I think the 14 F15 started coming to the US in some capacity in December of 2013. For the G05 it was November of 2018.

[TurtleBoy]

I'm thinking they must have had supply issues in 2022 but the Infiniti QX60 was up 77% but is still way behind their yearly sales prior to COVID.

[eelnoraa]

Originally Posted by TurtleBoy

I'm thinking they must have had supply issues in 2022 but the Infiniti QX60 was up 77% but is still way behind their yearly sales prior to COVID.

Oh maybe I can comment on Infiniti qx60 a bit. 2022 is a major design change since like 2013. The new car really didn’t start delivery until 2nd half is the year. And supply was small. It was on our shopping list.

Before the new model, qx60 sale was mainly supported by huge manufacturer incentive. I leased one in 2018, 53k msrp. Risidual was 57% for 39 month. Very high. Selling price was reduced to 43k. With multiple MSD, money facor is 0.0002, yes 3 zeros. I ended up paying $360/month with zero down. Nissan started to cut the support in 2020. I was told they want to get out of the the rental fleet, deep discount image, and want buyer to see infinite as a premium brand as they were in 2000s. But this plan hasn’t gone well with the combination of Covid and economy.

[TurtleBoy]

Originally Posted by eelnoraa

Oh maybe I can comment on Infiniti qx60 a bit. 2022 is a major design change since like 2013. The new car really didn’t start delivery until 2nd half is the year. And supply was small. It was on our shopping list..

Thanks, that would explain the huge jump.

[swainbmw]

Originally Posted by James_G0540i

I think it's completely explainable by:-

1. Interest rate hikes and the cost of finance which has gone up. The majority of people lease these things, and with higher interest rates, people are probably choosing to keep their cars longer, or move into less expensive more efficient vehicles.

2. Absolutely agree with peoples comments about cost of living and wages not keeping up with inflation. People will prioritise "needs" like food and their home morgage, over "wants" like luxury cars.

3. Competition has become fierce, and BMWs constant removal of features isn't helping their cause. People are chasing value, so why buy a car that has less than the same model car 3 years back for more dough ....

A good wake up call for BMW, maybe the "electricification" strategy/approach isn't working, all I know is if the next X5 costs 20-30% more it'll spell the end of large X5 sales....

They should be adding Features to beat their competitors value and packages.

[hotvee]

Originally Posted by swainbmw

They should be adding Features to beat their competitors value and packages.

And come up with a better design, especially interior.

I think the main reason for the sales decrease is that the LCI is clearly unsuccessful itself. Problems with 50e, cost cutting by removing and simplifying features, controversial design, eliminating hvac controls, bad UI in iDrive 8 which they eventually had to upgrade to 8.5, etc - it all contributed to the sales decrease. Like it was said before on this forum - LCI G05 didn't really give people anything extra besides the higher price tag. Adding MHEV, slight hp bump and improved DAP coupled with all the mentioned negative changes doesn’t really justify the purchase.

[swainbmw]

Originally Posted by hotvee

And come up with a better design, especially interior.

I think the main reason for the sales decrease is that the LCI is clearly unsuccessful itself. Problems with 50e, cost cutting by removing and simplifying features, controversial design, eliminating hvac controls, bad UI in iDrive 8 which they eventually had to upgrade to 8.5, etc - it all contributed to the sales decrease. Like it was said before on this forum - LCI G05 didn't really give people anything extra besides the higher price tag. Adding MHEV, slight hp bump and improved DAP coupled with all the mentioned negative changes doesn’t really justify the purchase.

Vw had the same Problems with their product line . They’re going to go back to buttons on future models

[Bavar-ian]

Where i am, the car sales are pegged to the little island's COE and tax system.
A brand new LCi now costs SGD460k, about USD330k for 10yrs of ownership.

[eelnoraa]

Originally Posted by Bavar-ian

Where i am, the car sales are pegged to the little island's COE and tax system.
A brand new LCi now costs SGD460k, about USD330k for 10yrs of ownership.

Why 10 years?

[TexAg91]

Originally Posted by eelnoraa

I cannot find nice table, but did some some number for X5 sale quarter by quarter

Quarter: 2023; 2022
1st: 17,315 ; 16,477
2nd: 18,575 ; 19,049
3rd: 15,986 ; 21,077
4th: 20,697 ; 25,769

It seems first half, they are relatively even. 2nd half is where the drop off come. Both 3rd and 4th drop by 24.2% and 19.7% respectively. Quick seach said 1st delivery of LCI is around end of April/beging of May? Seem LCI plays a part here. Not saying it isn't a better car, but maybe pricing structure turns a good number of people off?

That is right when interest rates started increasing significantly— making these cars more expensive. The interest rate not only affects purchases, but also leases. The slight downturn and sales is most likely due to cost of ownership increases.(a higher monthly payment.)

[eelnoraa]

Originally Posted by TexAg91

That is right when interest rates started increasing significantly— making these cars more expensive. The interest rate not only affects purchases, but also leases. The slight downtime and sales is most likely due to cost of ownership increases.(a higher monthly payment.)

Actually interest rate started to go up in middle of 2022 for auto load. The fed fund rate went up about 1 quarter earlier, and flatted out in Aug of 2023 at current rate.

It will be interesting to see how Audi q7 and mdx quarter to quarter change. If interest rate is the reason, should reflect on them as well. I think I can pull Acura numbers. Let me update tonight.

[TurtleBoy]

Originally Posted by eelnoraa

Actually interest rate started to go up in middle of 2022 for auto load. The fed fund rate went up about 1 quarter earlier, and flatted out in Aug of 2023 at current rate.

It will be interesting to see how Audi q7 and mdx quarter to quarter change. If interest rate is the reason, should reflect on them as well. I think I can pull Acura numbers. Let me update tonight.

Audi Q7 was up 31% for Q2, 97% for Q3 and 27% for Q4.

Here are the MDX sales for the two years:

[TurtleBoy]

Originally Posted by TexAg91

That is right when interest rates started increasing significantly— making these cars more expensive. The interest rate not only affects purchases, but also leases. The slight downtime and sales is most likely due to cost of ownership increases.(a higher monthly payment.)

Why do you think the interest rates affected the SUV sales but not passenger car sales? I would think that the majority of purchasers are in the same demographics.

[TexAg91]

In general, SUVs cost more than sedans and get worse MPG. They are more expensive to operate.

[TurtleBoy]

Originally Posted by TexAg91

In general, SUVs cost more than sedans and get worse MPG. They are more expensive to operate.

That is a reasonable theory. From the data we have, I personally don't think that interest rates, or the economy in general, had much of an effect on the downturn for BMW SUVs but it could have.

[mnx5er]

There is more to this. My two local Minnesota dealers typically stock a bunch of X5s. One of them had 30 or more usually. Right now they can barely keep 2 or 3 in stock, sometimes they do not have any. All indications are they cannot get the allocations they need.

The X3 was terrible for supply most of the year also - it improved in Q4.

There are a number of people who will order an X5. But a lot of shoppers still want to drive one and buy it. The sales people I talked to confirmed the low inventory was killing them for sales.

No idea why BMW could not provide enough inventory (and it is still very low).

Just did a quick look around the country at some dealers. Inventory is low everywhere.

Perhaps BMW has shifted away from inventory cars?

[Grun123]

Inventories were much lower this summer when I bought my M60i and was relatively long lead time for ordering a build. Ended up buying mine off the lot with basically all the specs I wanted which ended up being a “deal” as I was cross shopping SQ8s which were ~$10K more expensive for similar spec (and way worse tech) and RRS which were ~$10K cheaper (with way less HP / tech and less sporty handling). Don’t love every aspect aspect of the M60i but overall think it’s a great car. That being said, cars have gotten so expensive in general - kind of boggles my mind a mid size luxury SUV is now over $100K.

[Shareandenjoy]

Originally Posted by mnx5er

There is more to this. My two local Minnesota dealers typically stock a bunch of X5s. One of them had 30 or more usually. Right now they can barely keep 2 or 3 in stock, sometimes they do not have any. All indications are they cannot get the allocations they need.

The X3 was terrible for supply most of the year also - it improved in Q4.

There are a number of people who will order an X5. But a lot of shoppers still want to drive one and buy it. The sales people I talked to confirmed the low inventory was killing them for sales.

No idea why BMW could not provide enough inventory (and it is still very low).

Just did a quick look around the country at some dealers. Inventory is low everywhere.

Perhaps BMW has shifted away from inventory cars?

Inventories are expensive...and can become a problem...plus may require lot of sales incentives from the brand...and this goes against the constant search for higher marginality.

I am not an expert of the car industry, but my feeling is that the whole market will be shifting away from the concept of "reseller" as we know it today to a different business model, all driven by the vendor who wants higher profit.

- Vendor will sell more and more directly, removing one step in the tier (the reseller)
- Vendor can thus dictate the pricing, with almost no negotiation.
- So no more end-of-year incentives, special discounts for hitting sales targets etc. etc.
- You will be ordering on-line
- There will be few branded vendor shop where you can test drive
- Reseller (less branded, more generic) will be providing car delivery / post sales
- On-line purchasing of features will be the standard
- More and more subscriptions required to operate your car

All good on paper, great business case on an Excel file.

And a huge door opener for Chinese brands, that will be what most "normal" people will be able to afford and that will still use a classic reseller model.

(ok, maybe this will require a separate thread!)

Have a great Sunday

[eelnoraa]

Originally Posted by TurtleBoy

Audi Q7 was up 31% for Q2, 97% for Q3 and 27% for Q4.

Here are the MDX sales for the two years:

wah, you are just awesome. I just do some math with your number. So MDX did fine with the interest hike and economy. And as you indicated, Q7 did OK too.

[X6ix GTA]

Originally Posted by eelnoraa

wah, you are just awesome. I just do some math with your number. So MDX did fine with the interest hike and economy. And as you indicated, Q7 did OK too.

One more variable to consider is the actual interest rate that the car manufacturers are charging the buyers. E.g. in Canada, Asian brands have always offered lower rates compared to the Germans. Under normal economic conditions it may not matter but perhaps under current conditions they can sway a buyer's decision. Though on the second thought, a buyer of this class most likely isn't that price sensitive.

Here are the current lease rates for comparison.

X5 6.49%
Q7 5.99%
MDX 3.99%

[TurtleBoy]

Originally Posted by X6ix GTA

One more variable to consider is the actual interest rate that the car manufacturers are charging the buyers. E.g. in Canada, Asian brands have always offered lower rates compared to the Germans. Under normal economic conditions it may not matter but perhaps under current conditions they can sway a buyer's decision. Though on the second thought, a buyer of this class most likely isn't that price sensitive.

Here are the current lease rates for comparison.

X5 6.49%
Q7 5.99%
MDX 3.99%

Also when looking at those it is often no longer the economy dictating them but rather marketing so those could be considered under a product factor rather than economic.