[gmzanatta]

In order to kill some time while waiting for the M2, I thought we could start some healthy speculation as to why production has been slow.

The article at the end of this post (from Road & Track) gives some pretty interesting information:

- In 2015, BMW sold a total of 157,144 '2-Series' cars

- Of those, a whopping 107,000 were the FWD Gran/Active Tourers

- The remaining 50,144 were coupes (mix of 228i, M235i, and convertible)

So what does that mean for the M2? Well, when you crunch the numbers, for every coupe sold, BMW sells TWO FWD tourers - or to look at it differently, TWO THIRDS of all 2-series sales are FWD tourers.

To further complicate things, that one coupe can be one of three possible models and once you add the M2 into the mix, that further splinters the coupe segment into four.

So if we were to look at it from a business perspective, BMW is much more likely to be cranking out the Tourers compared to coupes, reducing coupe production. We can then apply the same logic to the coupe segment, meaning that, as far as production number and priority goes, the M2 is fairly low on the list.

Anyway, that is just my speculation for the time being, to keep my mind off of the ridiculous wait until my car gets here in July.

Article: http://www.roadandtrack.com/new-cars...pe-two-to-one/

[Corinne]

Except that they must be making more profit on the highest priced version... the M2. So if they want to maximise profits one would expect them to increase production of the M2 at the expense of the Tourer which presumably is the cheapest and therefore least profitable version...

[3tekcorps]

It's all about the $$.. The M2 draws a bunch of excitement for the brand and is a great marketing tool. People will go down to dealerships and get cross sold into other models. My SA was trying to do that the minute I mentioned the M2. I would also bet it's a lower margin unit and they will never pull much production away from higher margin units. That doesn't make sense.

I think we are getting played!

[gmzanatta]

Originally Posted by Corinne

Except that they must be making more profit on the highest priced version... the M2. So if they want to maximise profits one would expect them to increase production of the M2 at the expense of the Tourer which presumably is the cheapest and therefore least profitable version...

Margins on the M2 are actually lower than M235i.

Biggest margin is on the bulk sellers like the 228i and Tourers.

[3tekcorps]

Originally Posted by gmzanatta

Margins on the M2 are actually lower than M235i.

Biggest margin is on the bulk sellers like the 228i and Tourers.

I think you've just answered your own question

[caminator]

M2 is a halo product for the 2series. Its actually in their best interest to produce low volumes and keep it desirable.

[gmzanatta]

Originally Posted by 3tekcorps

I think you've just answered your own question

Haha ya I knew going into it what the most likely answer was plus need to keep myself busy so I don't go crazy while waiting

Mostly was blown away at the 2/3 tourer number and wanted to share.

[weyland]

Ditto the above, M2 low volume, low margin, high volume cars = larger margin over time.

The 2 series gran tourers aren't cheap. My dad bought a new 2 series 118D gran tourer sport model with a hand full of cheap options, cost £28k after discount (UK). I think it is a lot of car for the money compared to other things, but equally when they are knocking them out at this volume, there is money to be made.

[Artemis]

The M2 base version might also exist to sell more M3/M4, if not now, at least in the future, to the prospective customer.

Food for thought.

[weyland]

Definitely. They might even be trying to purposefully keep residuals high to make the move up even easier - maybe another reason to restrict volume.

For instance, I couldn't jump straight in to an M3/M4. But if I have an M2 and all of a sudden the cost to trade up is small, it makes it easier than jumping straight in to the deep end.

[Artemis]

Originally Posted by weyland

Definitely. They might even be trying to purposefully keep residuals high to make the move up even easier - maybe another reason to restrict volume.
For instance, I couldn't jump straight in to an M3/M4. But if I have an M2 and all of a sudden the cost to trade up is small, it makes it easier than jumping straight in to the deep end.

Prospective M2 customer: "Uh, really no other colors than those ? And no HUD ?"
BMW dealer: "Don't worry, dear client. We can take care of that. Let me take you to the car over there in our showroom [points towards an M3 or M4]. It's great too."

[dammitcubs]

I'm in manufacturing - its all about cycle time. Need more information for analysis to understand this thoroughly.

[caminator]

Originally Posted by dammitcubs

I'm in manufacturing - its all about cycle time. Need more information for analysis to understand this thoroughly.

I remember reading somewhere that the cars are removed from the line to add the m3/4 suspension components, extending the time considerably. Can't find the article but it might explain part of it.

[Artemis]

Originally Posted by caminator

I remember reading somewhere that the cars are removed from the line to add the m3/4 suspension components, extending the time considerably. Can't find the article but it might explain part of it.

Here you go:

http://f87.bimmerpost.com/forums/sho....php?t=1210373
("BMW M2: more production time required than other models at the Leipzig factory")

[M3 Adjuster]

Originally Posted by Corinne

Except that they must be making more profit on the highest priced version... the M2. So if they want to maximise profits one would expect them to increase production of the M2 at the expense of the Tourer which presumably is the cheapest and therefore least profitable version...

It's a common assumption that any M model has a higher margin that other models because it is the top of the line.

In the case of the 1M and M2 its my personal opinion that it's the lowest Margin vehicle in the 2 series lines up and it has the highest cost associated with it.

Volume reduces costs per unit of production.

The profit on a high volume run of low profit cars is more than even a higher profit on a lower volume of cars. Even if I am incorrect on the M2 profit .. The sheer volume of product and sales will make the 228 and 235 more profitable.

The super high volume 3/4 series or X series is where BMW wants buyers to go.

[pruettfan]

I love how folks that have no information to go on make statements about the difference in profit margin between models. The fact is none of us have any factual basis for a conclusion like that. I would find it odd however for BMW to invest in developing a new model, bring that model all around the world touting it as a new segment, spend a bunch of money on marketing and then not build the cars. My guess is that given the launch date of April 16th they don't want to build a ton of cars that will clog up the flow of their inventory by sitting in port or at dealers for months waiting for the launch date. I don't think we can say if BMW is slow in building these cars until we get past or near that April date. My guess and its only a guess is that we will see them build at a much faster pace between April and the end of the model year when they shut down for holiday.

Manufacturers frequently build in uneven cycles. They try and find the right days supply of each model to ensure there is adequate supply for dealers to sell without having a glut of inventory sitting for months at a time. I follow the industry quite closely and its not unusual to see these never production cycles. Also the assumption of the OP is the factory runs at full capacity everyday. That is also a big assumption. Probably best for us to chill until we see what regular production looks like.

[gmzanatta]

Originally Posted by pruettfan

I love how folks that have no information to go on make statements about the difference in profit margin between models. The fact is none of us have any factual basis for a conclusion like that. I would find it odd however for BMW to invest in developing a new model, bring that model all around the world touting it as a new segment, spend a bunch of money on marketing and then not build the cars. My guess is that given the launch date of April 16th they don't want to build a ton of cars that will clog up the flow of their inventory by sitting in port or at dealers for months waiting for the launch date. I don't think we can say if BMW is slow in building these cars until we get past or near that April date. My guess and its only a guess is that we will see them build at a much faster pace between April and the end of the model year when they shut down for holiday.

Manufacturers frequently build in uneven cycles. They try and find the right days supply of each model to ensure there is adequate supply for dealers to sell without having a glut of inventory sitting for months at a time. I follow the industry quite closely and its not unusual to see these never production cycles. Also the assumption of the OP is the factory runs at full capacity everyday. That is also a big assumption. Probably best for us to chill until we see what regular production looks like.

While I agree with some of what you said, the fact of the matter is that dealers in Canada, France, Switzerland and I'm sure other countries are already booking customers in 2018.

Also, the profit margins on M2 are indeed lower than M235i - this was discussed in another thread in detail including comparison between invoice, MSRP, etc. Plus in Canada a fully loaded M235i actually costs more ($6,000 to be precise) than a similarly equipped M2, but invoice prices make the M235i much more profitable for dealership.

[SW19]

Originally Posted by gmzanatta

While I agree with some of what you said, the fact of the matter is that dealers in Canada, France, Switzerland and I'm sure other countries are already booking customers in 2018.

Also, the profit margins on M2 are indeed lower than M235i - this was discussed in another thread in detail including comparison between invoice, MSRP, etc. Plus in Canada a fully loaded M235i actually costs more ($6,000 to be precise) than a similarly equipped M2, but invoice prices make the M235i much more profitable for dealership.

The US is also still waiting for allocation numbers for 2016 M2 customer ordered cars.It looks like the only cars that are going to be delivered by April 16 in the US and Canada are going to be launch cars.That didn't happen with the launch of the M3 and M4.Customer cars were still delivered by the launch date.

[jasonheaddinG]

I ordered on 1/21, car hasn't even gone into production yet. I asked my SA to check and he said yep, I see the same thing and I have been told just not to ask about the M2.....

[M3 Adjuster]

Originally Posted by pruettfan

I love how folks that have no information to go on make statements about the difference in profit margin between models. The fact is none of us have any factual basis for a conclusion like that. I would find it odd however for BMW to invest in developing a new model, bring that model all around the world touting it as a new segment, spend a bunch of money on marketing and then not build the cars. My guess is that given the launch date of April 16th they don't want to build a ton of cars that will clog up the flow of their inventory by sitting in port or at dealers for months waiting for the launch date. I don't think we can say if BMW is slow in building these cars until we get past or near that April date. My guess and its only a guess is that we will see them build at a much faster pace between April and the end of the model year when they shut down for holiday.

Manufacturers frequently build in uneven cycles. They try and find the right days supply of each model to ensure there is adequate supply for dealers to sell without having a glut of inventory sitting for months at a time. I follow the industry quite closely and its not unusual to see these never production cycles. Also the assumption of the OP is the factory runs at full capacity everyday. That is also a big assumption. Probably best for us to chill until we see what regular production looks like.

Can you cite your source on all your statements on production? Lol.

Pot meet kettle ...

[gmzanatta]

Originally Posted by jasonheaddinG

I ordered on 1/21, car hasn't even gone into production yet. I asked my SA to check and he said yep, I see the same thing and I have been told just not to ask about the M2.....

Jeez, that can't be good

[TGDavey]

My order was submitted December 2015. Build date was 05/Feb 2016.
Rang my dealer today who informed me to pick up my M2 April 16.