BMW Drops Most in Seven Years After Scrapping Profit Forecast

[BGH]

Originally Posted by zete

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.

Was it repairs or was it because BMW no longer covers all the maintenance after that point?

[zete]

Originally Posted by BGH

Was it repairs or was it because BMW no longer covers all the maintenance after that point?

Both, but mostly the repairs. The last straw for one of my uncles came a few weeks ago when his 5 year old 3 series wouldn't start. He had to fix it and then traded it in on an Accord. No more BMWs for him. He's had nothing but problems once the warranty expired. He said he's through with German cars.

[Carver]

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.

Their sales were hugely tied to cheap money, especially in the form of leases. This is bad news considering that 60% of BMW sales were in the form of leases rather than retail purchases.

Leases account for 60% of BMW's sales in the U.S. compared to just 20% of sales in the industry as a whole. As such, BMW will begin offering incentives like never before to encourage customers to buy a vehicle instead and reduce the number of leases it has on the books. In some cases the German brand is offering loans with finance rates as low as 0.9% over five years, and of course these incentives will be aided by a commensurate raise in lease prices, as well.

Without the ability to cheaply finance leases, BMW sales, and those of other luxury makes, will suffer tremendously.http://www.autoblog.com/2008/08/01/l...ts-you-to-buy/

[emh]

Originally Posted by zete

I don't know anyone willing to own a BMW out of warranty. Everyone I know who has one leases.

BMW does rely heavily on leases. A friend of mine is a sales manager at a BMW dealership in SoCal, and he says 90-95% of his customers lease. But it's less because of maintenance concerns than the attractive rates they've had -- you can lease a 7 series for less than the payment on a 328. Also, a good chunk of BMW buyers are the type who won't keep a car longer than 3 years, so why not. BUT, whetever the reason, high lease rates will hurt BMW quite a bit.

Originally Posted by genjy

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

Yup, MB has been terrible lately.

Originally Posted by HoosierRon

Good news for Americans employed in factories that make Cadillacs.

Except Cadillac is being starved -- STS and XLR being killed, DTS replacement delayed, BTS uncertain, Escalade sales tanking. Cadillac can live on the CTS alone for only so long.

Originally Posted by zete

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

Just out of curiosity, how much (the people I know who own Porsches change the oil themselves)?

[BGH]

Originally Posted by zete

Both, but mostly the repairs. The last straw for one of my uncles came a few weeks ago when his 5 year old 3 series wouldn't start. He had to fix it and then traded it in on an Accord. No more BMWs for him. He's had nothing but problems once the warranty expired. He said he's through with German cars.

From my experience with BMW only the X5 gave me problems. LOL sometimes the door wouldn't open. But that car was like 7 years old and maybe 300km and had been in a major accident.

All the 3 series I've experienced have been great. Usually about 4 years old sometimes a little older and they're holding up very well.

However, if something does break on a BMW its going to be incredibly expensive, sometimes I wonder why the Germans don't simplify the mechanics a little.

VW actually might be the worst in that regard.

[zete]

Originally Posted by emh

:
Just out of curiosity, how much (the people I know who own Porsches change the oil themselves)?

The number i heard was $1500 on a 911s.

Then you see something like this article on the $45k oil change. The oil change was $7,000! So the 911 oil change is a deal!

[zete]

Originally Posted by BGH

From my experience with BMW only the X5 gave me problems. LOL sometimes the door wouldn't open. But that car was like 7 years old and maybe 300km and had been in a major accident.

All the 3 series I've experienced have been great. Usually about 4 years old sometimes a little older and they're holding up very well.

However, if something does break on a BMW its going to be incredibly expensive, sometimes I wonder why the Germans don't simplify the mechanics a little.

VW actually might be the worst in that regard.

Of the folks I know that owned or own a BMW, the following are problems in and out of warranty. Most were in warranty, but some bad ones were out of warranty for the few that kept them more than the warranty period.

• Would not start (multiple individuals)
• Window actuator failure (multiple individuals, multiple times same car)
• Windshield water bottle cracked
• Doors would not open (usually 7 series)
• Trunk would not latch/open (usually 7 series)
• Transmission problem (7 series)
• Stalling (7 series)
• Air conditioner failure (5 series)
• Brake failure (M5)

Those are the ones I'm familiar with and that come to mind. I do know a relatives' 330 was an endless stream of issues until he got rid of it. Everything form engine problems to failed electrical components to stuck doors, etc. The irony was the day his lease expired and he had to bring the car back it wouldn't start so he had it towed in. He now drives a Camry which has been perfect. He won't buy a BMW again.

The 7 series seem especially bad, especially early on. One of my friends who had one had BMW buy it back it was so bad. It stalled repeatedly, though BMW couldn't find out why. It once stalled on the 401. He said he was never so scared in his life, especially as there was a tractor-trailer behind him and he had no power. It was after that incident that BMW bought the car back from him. He opted for another 7, this one has had fewer problems. He'd prefer to buy a Cadillac but Cadillac offers nothing in the 7s range. He's wealthy enough to buy a Sixteen if Cadillac had the brains to build that.

The M5s brakes failed in a parking lot, so it was easy to stop with the hand brake. But he said his dash lit up like a Christmas tree. It was the ABS sensor that failed, causing havoc.

I only know of 2 people with X5s. One has had no end of problems -- the guy drives an Acadia now. The other guy has had no problems.

[baloo]

Originally Posted by zete

The number i heard was $1500 on a 911s.

You're high. A late model 911 oil change is around $130, including 8.5 quarts of synthetic.

[vcs2600]

Yes, there's a lot of anecdotal evidence that old BMWs are a money pit. But do we have any evidence that their historically excellent resale value is softening?

More restrictive leases could just be a response to competitive pressures or a tightening credit market too.

[ford&holden]

Can anyone remember a year where BMW actually lost money worldwide??
I don't see this result being a worry at all, at least they are making money.

[zete]

Originally Posted by baloo

You're high. A late model 911 oil change is around $130, including 8.5 quarts of synthetic.

That's the number he told me. I'll have to ask him again. Maybe I misunderstood. I just stared at him like he was nuts.