[TurtleBoy]

We were discussing the YOY declining sales of the X5 the other day and it appears that trend continued for the remainder of the year. Given that almost all BMW SUV sales are down it is not clear if the problem is the LCI, a general trend, or some other factor.

We mentioned that it may take a big sales decline for the X5 in order for BMW to reverse some of the cost cutting and elimination of features/options that competitors have, perhaps this is the start of it. Of course one year does not make a trend.

Hopefully we get YOY numbers from other manufactures soon to see how they did.

[cobramite]

Probably because they integrated a few climate buttons.

[X3_Alaska]

Originally Posted by TurtleBoy

We were discussing the YOY declining sales of the X5 the other day and it appears that trend continued for the remainder of the year. Given that almost all BMW SUV sales are down it is not clear if the problem is the LCI, a general trend, or some other factor.

We mentioned that it may take a big sales decline for the X5 in order for BMW to reverse some of the cost cutting and elimination of features/options that competitors have, perhaps this is the start of it. Of course one year does not make a trend.

Hopefully we get YOY numbers from other manufactures soon to see how they did.

I wonder what the reason was for the surge of X3 sales in the 4th quarter.

[TurtleBoy]

Originally Posted by Alaska_X5

I wonder what the reason was for the surge of X3 sales in the 4th quarter.

I noticed that also. I don't follow their incentives or pricing so don't know whether anything with that changed.

[TurtleBoy]

Originally Posted by cobramite

Probably because they integrated a few climate buttons.

I wouldn't think it is just the buttons but rather what could be perceived as a lack of value compared to the competition. While the X5 still has the driving experience over most everyone else, one could argue it no longer has the luxury that many others do.

Like mentioned, one year doesn't necessarily mean anything but it will be interesting to see what the numbers are for Lexus, Acura, Genesis, etc. If we see their comparable SUVs holding steady or even increasing YOY, the decline in X5 sales may have more to do with the X5 than general market or economic factors.

[cobramite]

There are literally millions of people in this country whose salaries have not come anywhere near keeping up with the 20 some percent inflation we have indured over the past 3 years.
A $100,000 X5/X6 purchase can be eliminated allowing funds for basic necessities to be in the family budget. Maybe some of these people opted for a less expensive X3 or stuck with their current vehicle and did not buy anything new.
I look at the prices of food, stuff at the mall, electronics, etc., and it really gets your attention. Ya gotta wonder where all this is going or if America will ever be affordable again for many people.

[BlkGS]

Cobra has some good points, cost of living goes up, but salaries haven't matched that. The vast majority of X5s are low spec leases, usually to people who are stretching to get there. To those people, stepping down to an X3 might be a necessity.

That said, X3 gets WAY more positive press than X5. Everyone talks about the B58 X3 M40i, what a value it is, how fast, how efficient, etc. There's a lot less chatter about the X5. X5 is in a tough spot where it isn't a 3 row like X7, but it also isn't a LOT bigger than X3, which is cheaper and in many cases faster. So you've got the smaller cheaper option with tons of good press and a sporty trim that gets gray fuel economy, or you put that same engine in a X5 and youre getting the ho.hum lease special model.

I think BMW would do well to add a M45i type model that gets all the M50/60 stuff, but with a boosted B58. That'd be a very interesting package, but one they likely won't do (at least maybe until the next gen).

I also think that all the "gotta have it" buyers are drying up. People don't want to pay inflated MSRPs and inflated interest rates for vehicles that are decontented. People weren't paying their student loans during COVID, and there was a lot of cheap new money flying around, and that's all over with.

[Colibri]

Agree: cost of living - wage growth. Also, interesting to see data on inventory build (or just produced less based on forecasts) as well as other manufacturer data... Are they losing market share or is it more a factor of inflation outpacing wage growth?

The X3 and X1 data alone here, tells me its more a personal finance factor (but don't have other manufacturer data).

[cobramite]

Originally Posted by Colibri

Agree: cost of living - wage growth. Also, interesting to see data on inventory build (or just produced less based on forecasts) as well as other manufacturer data... Are they losing market share or is it more a factor of inflation outpacing wage growth?

The X3 and X1 data alone here, tells me its more a personal finance factor (but don't have other manufacturer data).

Attachment 3357223

Good grief, that is absolutely hideous, wow.

[TurtleBoy]

Originally Posted by Colibri

Agree: cost of living - wage growth. Also, interesting to see data on inventory build (or just produced less based on forecasts) as well as other manufacturer data... Are they losing market share or is it more a factor of inflation outpacing wage growth?

The X3 and X1 data alone here, tells me its more a personal finance factor (but don't have other manufacturer data).

I'm not sure that would explain the increase in sales for the 5 and 7 series.

Just saw the Lexus numbers, the RX was up 18.7% YOY.

[Rob_G77]

I'd say it's quite clear that sales shifted from X5/X6 to X3/X1. Here in Canada the X5 went up at least 20% in price the past 2 years. Dealers have resorted to ordering less equipped X5 for inventory to keep the price reasonable, but the luxury aspect really feels gone from these models now.

Another thing to keep in mind is that the X3 still has ID7 and the standard HVAC controls. Customers could also be just wanting BUTTONS and are not enamored by the kludgy looking screen in the X5. I think the LCI is NOT what most customers want as far as interior dash design and operating system.



Rob

[BlkGS]

Originally Posted by TurtleBoy

I'm not sure that would explain the increase in sales for the 5 and 7 series.

Just saw the Lexus numbers, the RX was up 18.7% YOY.

5 series was down YoY. 7 series I think is bought by a different client type than X5, X7, etc.... and I think it just came out with an all new one. That could suggest that people at the top aren't feeling the squeeze, but people in the middle to upper middle are.

RX being up YoY would seem to indicate that people are moving towards a lowest cost rival.

[aaaaaaaaaz]

My uneducated guess is:

- for general trend of sales declining:
1. the economy (inflation, negative confidence of economy, stale wage growth, high borrowing cost) slows down demand for expensive SUVs
2. disruptions of production in Spartanburg (new model introduction and LCI requires production line change; possible quality issue for new models require debugging) slows down production and decrease supply

- for X3 sales climb:
1. BMW NA forecast decline of larger SUV sales and want to make up the number that need to be reported. Inflate X3 sales seems to be easiest way out
2. Less MSRP increase for X3 as end of generation MY; also heavy subsidy and incentive
3. I wonder if they imported more base model X3 from South Africa factory?
4. I wonder if there is whale fleet sale deal? Seems lots of X3 with rental fleet recently.

[TurtleBoy]

Originally Posted by BlkGS

5 series was down YoY. .

No, it was up 7.4% YOY.

[BlkGS]

Originally Posted by TurtleBoy

No, it was up 7.4% YOY.

Chart says down 9.9%...

It's a shame they don't break out electric models separately. Curious how the i4 is doing.

[LOFT]

Fascinating data. Agree with everyone above that all these data points tell a story but not the whole story.

Overall BMW NA enjoying a 9.4% growth to 395,741 vehicles in 2023. Unit sales however are not analogous to profits if high margin vehicles are down, ie. the X5 and X3's??

Big jumps are X1's and IX's which presumably and concurrently reflect cost concerns and consumer preference growth and tax incentives for EV's?

And as stated above a big surge of X3's in Q4 but not quite enough to match 2022 sales.

So as Turtle Boy has reported earlier, BMW management sees that it makes sense to merge the platforms of X5 and IX models for both cost savings and managing potential growth and transitions of existing and future cash cows?

On an aside, I see the 4 series is doing well with a jump of 37.4% to almost 51K units in 2023. It drops in Q4 which maybe reflects seasonality. Maybe I'll make this my next rental.

[TurtleBoy]

Originally Posted by BlkGS

Chart says down 9.9%...

It's a shame they don't break out electric models separately. Curious how the i4 is doing.

Nope, chart says up 7.4%. You are looking at Q4 only.

[Rob_G77]

8 series I am surprised isn't worse. That one is just about done though.

Rob

[Colibri]

Originally Posted by TurtleBoy

I'm not sure that would explain the increase in sales for the 5 and 7 series.

Just saw the Lexus numbers, the RX was up 18.7% YOY.

Didn't catch the 5 and 7 series, thanks. Interesting. A lot of variables - not so cut and dry, indeed.

[BlkGS]

Originally Posted by TurtleBoy

Nope, chart says up 7.4%. You are looking at Q4 only.

Doh. You're right. Been a long day.

I wonder if dropping the V8 for the 5 LCI might have created some short term demand?

[Colibri]

Originally Posted by cobramite

Good grief, that is absolutely hideous, wow.

ha! totally agree, very busy and a lot more to it - wasn't intended for this discussion but something from work yesterday I had at the ready

[cobramite]

Originally Posted by BlkGS

5 series was down YoY. 7 series I think is bought by a different client type than X5, X7, etc.... and I think it just came out with an all new one. That could suggest that people at the top aren't feeling the squeeze, but people in the middle to upper middle are.

RX being up YoY would seem to indicate that people are moving towards a lowest cost rival.

People "in the middle" always get shafted on just about everything, taxes, wages, you name it and it is not going to get any easier as they are going to be footing the bill for 10 million illegals who have found a new home.