[SW19]

Sounds about right based on previous posts by reppucci but aren't you supposed to cite a source when you post a thread like this?

[M///Fanatic]

Originally Posted by AllwaysLow

That's what I said about my E46.... until the M2 came about.

Exact same story here...

Sold the E46 M3 last summer for the M2 that's been in order since 2/17/16.

ED set for the beginning of May and Performance center in June! Can't wait!

[DivideBYZero]

Originally Posted by Hankdoll

The 1M was 2011. My E82 was a 2013. So closer to the middle of the production cycle (for US market). I believe the N54 was at the end of its cycle, though.

The platform was introduced in 2004...

[ej25lol]

Originally Posted by Bluenose-2er

I am not sure BMW worries about exclusivity of their M2, but agree there is no real motivation to "ramp up" production when other cars make them more money and are not as labour intensive on the production line. It will be hard to even maintain the same production levels if they start including M2 CS models (albeit in 2018) in the same line. Possibly those will just eat into the regular M2 slots on the line.

Are the other cars really making more money than the m2? From my knowledge, the M2 is almost always sold at MSRP or above, vs other cars always having a discount. I'm actually really curious.

[gmzanatta]

Originally Posted by ej25lol

Are the other cars really making more money than the m2? From my knowledge, the M2 is almost always sold at MSRP or above, vs other cars always having a discount. I'm actually really curious.

The profit margin on the M2 is basically non-existent. It's more of a 'halo' car that will move people down to a M240i or up to an M3/4.

For example, a dealer might make 1.5-2% on an M2 and 6-8% on an X1/X3.

[Bluenose-2er]

Originally Posted by ej25lol

Are the other cars really making more money than the m2? From my knowledge, the M2 is almost always sold at MSRP or above, vs other cars always having a discount. I'm actually really curious.

This has been discussed in other threads. If you are really interested, do a little searching.

But it is known to be more labour intensive to produce as it needs to get taken off the assembly line at various stages of manufacture. Also, if you kit out a M240i (here in Canada at least) it is only about $5K less than the M2 (MSRP) and still does not have the M4 brakes, suspension and eLSD. The gap rises a bit if you go automatic... but the M240i auto tranny is nothing like the DCT in the M2.

True that other vehicles are often available at less than MSRP and the M2 never is (which kind of tells you something else ). But without knowing the precise production costs of BMW, based on the above I am still pretty confident in saying it is less profitable than a M240i.

Put another way, if it was MORE profitable they would definitely be making more room on the line at Liepzig for M2 production.

[bartginger]

Originally Posted by ej25lol

Are the other cars really making more money than the m2? From my knowledge, the M2 is almost always sold at MSRP or above, vs other cars always having a discount. I'm actually really curious.

How much money BMW makes on its vehicles has nothing at all to do with how much dealerships sell BMW's for. Dealers buy their cars directly from BMW, and are then free to sell them for whatever the market will bear.

[STK]

Originally Posted by bartginger

How much money BMW makes on its vehicles has nothing at all to do with how much dealerships sell BMW's for. Dealers buy their cars directly from BMW, and are then free to sell them for whatever the market will bear.

+1
The incentives for BMW and the dealerships are not always aligned.

[Destroya]

Originally Posted by bartginger

How much money BMW makes on its vehicles has nothing at all to do with how much dealerships sell BMW's for. Dealers buy their cars directly from BMW, and are then free to sell them for whatever the market will bear.

Good point. BMW sets the MSRP. We need to know whether BMW makes less profit on an M2 than other vehicles when setting MSRP, ( we assume so ) and what percent below MSRP the dealer purchases the car from BMW. I have heard that there is about a 9% difference between MSRP and dealer purchase price. If so, then the dealers are getting a good profit and BMW is lowering its margin for marketing reasons.

[Artemis]

Originally Posted by bartginger

How much money BMW makes on its vehicles has nothing at all to do with how much dealerships sell BMW's for. Dealers buy their cars directly from BMW, and are then free to sell them for whatever the market will bear.

And the market still bears, as we speak, that a new M2 is offered at MSRP or even with a markup, while the market struggles with a new M3 or M4 offered at MSRP or with a markup.

Strong demand (at least for now) is a tell-tale sign that depreciation - which will inevitably happen - will happen at a slower pace for the M2.

[Isty]

Originally Posted by AllwaysLow

That's what I said about my E46.... until the M2 came about.

In the same boat mate Always thought of my e46M as the only sports car I'll ever need! Then I drove the M2 twice and was sold, even tho they both were DCT's.

[Hankdoll]

Originally Posted by DivideBYZero

The platform was introduced in 2004...

Well, you said E82. E82 wasn't introduced in 2004.

[m34m]

Nice analysis by everyone. Can I just get a bottom line on how many regular M2's including LCI will be produced over its lifespan as an F87? I just want two numbers: global and USA/Can.

This will help me decide if I drive the shit out of my coming M2 until the doors fall off versus baby the thing and spend money on Xpel etc. and keep my 325i as a beater.

[BruceM]

Originally Posted by Destroya

Good point. BMW sets the MSRP. We need to know whether BMW makes less profit on an M2 than other vehicles when setting MSRP, ( we assume so ) and what percent below MSRP the dealer purchases the car from BMW. I have heard that there is about a 9% difference between MSRP and dealer purchase price. If so, then the dealers are getting a good profit and BMW is lowering its margin for marketing reasons.

The dealer I bought my M2 from has a "MSRP only" policy (from which they deviate from time to time (early i8s, for example)). My SA told me he could sell X models for "at LEAST $5000 under MSRP" and still have a much healthier margin than he does with M2s at MSRP. He said the lack of options on the M2 "kills" the big money hits he can otherwise get on X models, especially X5s.

[M3 Adjuster]

Originally Posted by ej25lol

Are the other cars really making more money than the m2? From my knowledge, the M2 is almost always sold at MSRP or above, vs other cars always having a discount. I'm actually really curious.

UNEQUIVOCALLY! I typed this up earlier and the app crashed on my phone..

Here is a little exercise to demonstrate BMW marketing and sales. Let's assume you are a BMW sales person and here are some of your products that " Joe Customer" is interested in

Product A- Available and in stock
9 colors available
7 options/packages
No individual
2 door available only
good leasing rates ( medium residual)
Dealer Profit on base unit - $3K


Product B- Backordered - 25 people in line
4 colors available -
1 option package
no Individual
2 door available only
horrible leasing rates (ridiculously low residual)
Dealer Profit on base unit- $4K


Product C - Limited stock
7 colors available
13 options/packages
Individual available
2 door or 4 door model available
very friendly leasing rates (high residual)
Dealer Profit on base unit - $6K



For this example.. I have kept the dealer profit on each item relatively close.. just to underscore the situation. In reality...I can tell you that the dealer profit on Product B is actually LESS than both A and C... but I am going to create this example with profit amounts rising as the base vehicle price rises.. (even though product price has little to do with profit dollars) because that's what most consumers THINK is how items are priced..


Ok.. Joe customer comes in and is interested in ALL three of these products.

as a sales person...

if you need to put food on the table TODAY... which model will you recommend to Joe?

Product A- the BMW M240 - and the reason you would do so is because
1- it's in STOCK and can be delivered right away - yay !
2- the customer can choose options that may increase the profit on the sale
3- leasing options provide a good option for the customer

If you aren't desperate for tonight's meal.... then more than likely you would recommend

Product C- the BMW M3 /M4 and the reason you would do so is because
1- it's either in stock or should be able to be ordered
2- the customer can choose MANY MANY options that may increase the profit on the sale
3- leasing options provide an excellent option for your customer


the item that you would NOT want to sell... is Product B - the BMW M2

Why would a sales person not want to make this sale?

1- it's not in stock and back ordered with many people in front of your customer
2 - there is only one option - therefore little room for additional profit on the sale
3- leasing options pretty much are a bad choice for the customer as product C is actually cheaper per month
4- Joe Customer will be calling you 2 x a week for months to see if his order is in


Keep In mind the additional profit that can be earned by the sales person products A and C.
Product B has nearly no room for additional profit.

in many situations... a DEALER Sales manager will handle the sale for a low margin product..

the reason being is that the manager who gets paid off the entire FLOOR sales.. can take additional time to work with Joe Customer. This frees up the other sales duds to sell higher profit items.


it doesn't take a rocket scientist to determine that the dealership is going to profit in the same way as the sales person of course..

At the manufacturer level.... the manufacturer will PRODUCE more of their HIGHER MARGIN products for sale, and then sell those to the dealers. The manufacturer will produce LESS of the lower margin items.

(notice how the M2 is NOT available in stock... but plenty of X1s are? ) It only makes sense for the manufacturer to sell as MANY of their high margin vehicle as possible. The manufacturer can INFLUENCE the sales of the higher margin products by making less of the lower margin products available.

Here endeth the lesson on Manufacturing and costs..

[Destroya]

No wonder my dealer hates me. I special ordered both my vehicles without a lot of options.

[Mr 2]

I know the numbers are not ramping up but just this past week I have gotten 3 calls/emails about an allocation that is available if I want it. I already have one ordered so I'm passing but seems like a lot of availability right now.

[arquitecto]

Originally Posted by Mr 2

I know the numbers are not ramping up but just this past week I have gotten 3 calls/emails about an allocation that is available if I want it. I already have one ordered so I'm passing but seems like a lot of availability right now.

Where are you getting these calls/emails from? Just curious as I am also in Orlando with an m2 going into production any day now.

[Mr 2]

Ocala. Gainesville BMW also called me to offer the special edition one with the m parts added. forget what the package is called.

[arquitecto]

Originally Posted by Mr 2

Ocala. Gainesville BMW also called me to offer the special edition one with the m parts added. forget what the package is called.

Glad to hear there are more of these around. I have passed on two local opportunities on pre spec'd cars: One lbb and one bsm, both were dct. Seems harder to find 6MT allocations up for grabs around here.

[M3 Adjuster]

Originally Posted by m34m

Nice analysis by everyone. Can I just get a bottom line on how many regular M2's including LCI will be produced over its lifespan as an F87? I just want two numbers: global and USA/Can.

This will help me decide if I drive the shit out of my coming M2 until the doors fall off versus baby the thing and spend money on Xpel etc. and keep my 325i as a beater.

It doesn't matter.

See high mileage E30 M3 prices ...

[emfive]

I got this lovely message from some dealer recently, true?

Since this marks the end of the M2 and we are not receiving many we are indeed going to be charging a premium for the remainder ones. In the past we have not asked for a short period of time but now that we know that this will be the last run and have received quite a bit of demand since people know we will be ending the production run of this very popular model. If we stop for any reason I can let you know or if I can get an exception.