Quote:
Originally Posted by doug_999
You are assuming they make $5K on every car. That's not the way it works. You could make $12,500 on one car and lose $2,500 on the next car and your average profit is $5K per car. Take out the loss and you are making $12,500 per car.
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I'm not making that assumption at all. You're making the leap that customers who use MSD are net-loss customers.
That is an assumption.
The numbers don't lie: BMW turns an average profit. Many businesses have net-negative profit SKUs (loss-leaders) or sales (customer acquisition programs), but what matters is growth and overall profitability. In that regard BMW is doing ok.
On this forum, the loss of the MSD program seems like a big deal. In the market? Most people don't even know about it.
All the hand-wringing over profitable vs non-profitable customers is just silly. BMW are turning a profit, and a pretty damn good one, as far as the industry goes.