BMW Drops Most in Seven Years After Scrapping Profit Forecast

[davidlane]

Even the vaunted BMW is having problems and making largre write downs and cuts:

http://www.bloomberg.com/apps/news?p...A6A&refer=home

[69Firebird400]

Misery enjoys company, so it's somewhat comforting to see formerly arrogant automakers like Daimler and BMW somewhat humbled.

[zete]

If I read the article correctly in today's paper, BMW is pushing their lease rates up much higher in Canada and eliminating some lease options on their cars.

I also noticed that Toyota bumped their lease options up substantially and seems to be pushing low interest purchase options much as GM has started doing.

This may be the end of the cheap lease.

[Chet]

Originally Posted by zete

If I read the article correctly in today's paper, BMW is pushing their lease rates up much higher in Canada and eliminating some lease options on their cars.

I also noticed that Toyota bumped their lease options up substantially and seems to be pushing low interest purchase options much as GM has started doing.

This may be the end of the cheap lease.

No more low lease rates = the 3 series will no longer be more popular than Accords here in the GTA.

[zete]

Originally Posted by Chet

No more low lease rates = the 3 series will no longer be more popular than Accords here in the GTA.

If you have to keep it long term -- i.e., out of warranty -- BMW is hosed. I don't know anyone willing to own a BMW out of warranty. Everyone I know who has one leases. This could all get very ugly very fast.

I wonder what will really happen now? Didn't BMW and Porsche have serious financial problems a while ago during the last economic downturn? Will this bring back those bad old days?

[baloo]

Making $800 million/quarter instead of $1,000 million/quarter is not exactly the end of the world, especially considering the market conditions.

[zete]

Originally Posted by baloo

Making $800 million/quarter instead of $1,000 million/quarter is not exactly the end of the world, especially considering the market conditions.

Yeah, but that's what GM said in the 80s. Look at them now.

BMW and others have to gauge whether their sales were directly tied to cheap money. If it was, then those sales are gone and so are the profits. Many folks run their finances way too close to the wire, and minor changes result in serious havoc. And major changes -- like now -- result in panic or worse.

[genjy]

Originally Posted by zete

If you have to keep it long term -- i.e., out of warranty -- BMW is hosed. I don't know anyone willing to own a BMW out of warranty. Everyone I know who has one leases. This could all get very ugly very fast.

I don't think BMWs are that bad reliability-wise and quality-wise.

Most people lease BMWs because BMW leases are affordable.

However, I would be terrified if I had to own a Mercedes out of warranty.

Just terrified.

[HoosierRon]

ship cars produced for the U.S. to other markets after sales ``deteriorated sharply over the past weeks.'' His prediction of ``another difficult year'' in 2009 comes seven days after Daimler AG lowered its forecast. Car sales in the U.S., BMW's biggest market, have fallen 10 percent this year

Good news for Americans employed in factories that make Cadillacs.

[baloo]

Originally Posted by zete

Yeah, but that's what GM said in the 80s. Look at them now.

BMW and others have to gauge whether their sales were directly tied to cheap money. If it was, then those sales are gone and so are the profits. Many folks run their finances way too close to the wire, and minor changes result in serious havoc. And major changes -- like now -- result in panic or worse.

Not every company with a drop in profits is 80's GM, especially if said drop occurs during an economic crisis and all the competitors are having the exact same problems.

[zete]

Originally Posted by baloo

Not every company with a drop in profits is 80's GM, especially if said drop occurs during an economic crisis and all the competitors are having the exact same problems.

Never said that. Just said you have to watch out because a drop can either be market driven, a bad economy, or a harbinger of something worse.

[zete]

Originally Posted by genjy

I don't think BMWs are that bad reliability-wise and quality-wise.

Most people lease BMWs because BMW leases are affordable.

However, I would be terrified if I had to own a Mercedes out of warranty.

Just terrified.

Those of my friends and family that have or own BMWs, to a one would never own one out of warranty. They just haven't been that well built.

And when I talk to my friends that own Porsches and they tell me how much an oil change costs, I just shudder.

[baloo]

[HoosierRon]

Originally Posted by baloo

Congratulations. If you have a 1 year old BMW, you don't have too many problems. If you have one that is out of warranty, run for cover.

As far as the sales downturn goes, I would not be too concerned. Just wait until the 11 mpg X6 M comes out. That will do wonders for sales.

[zete]

Originally Posted by baloo

I know about that chart, I'm just saying folks I know that own BMWs don't tend to buy into it, especially not out of warranty. That chart is cars that are 3 years old -- i.e., in warranty. Out of warranty is where it starts to hurt, according to my friends and family that have tried to own a BMW more than 4 years.