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Fwiw, the thread is about the sales of the new Z4

models, not leases.

Regardless, lease programs don't change the fact that the new Z4 and the Boxster are much closer in MSRP than was once the case. Last time I looked, it seemed they were less than $2k apart on the low end, and within $3k-$4k on the high end.

When you're talking about high $40's to mid and upper $50's for what many see as a weekend toy, I can assure you that the price difference is of no consequence.

There's also the issue I mentioned re quality and reliability. As hard as it may be to believe, BMW seems to consistently rate average or slightly lower than average in every poll I recall seeing in the last 2-3 years while Porsche seems to consistently rank fairly high. That makes it even easier for some to accept the cost of the car to be a few thousand more.

But it sounds like you only want to talk about price, when my comments more than anything had to do with who has the best "sports" car. I'm happy with my Z4 too (the outgoing M variant), but I'm not going to sit here and say the idea of owning a Porsche isn't an interesting thought. As I said, and which applies to me too, Porsche just has a much better reputation at building sportscars.

There's room for both, and each will find customers. But they will be customers with different means and different needs and wants.

Jim

Re: I DON'T agree with you re the Boxster.

I have an 04 z4, and .when I look at the price of the new one4

Re: I DON'T agree with you re the Boxster.

I have leased 3 Boxsters.
My lease is up and Porsche dealers do not have cars.
I leased a Z4 3.5 for much less than the Boxster.
If you compare similarly optioned cars, BMW is far less costly

I agree with you re the Boxster.

Specifically now that the Boxster and new Z4 are closer in price, I absolutely believe more people that may have otherwise looked at the Z4 will go back and look at the Boxster. And certainly more will actually buy the Boxster than may have a few years back.

Another reason, and this still baffles my brain, is that for a few years now Porsche has consistently ranked high in customer satisfaction, quality and reliability polls. I've seen many of those polls and it's always Lexus and Porsche back and forth at #1. Never thought I'd see the day. Otoh, I just saw yet another poll in the recent Roundel where BMW ranked slightly less than average.

And lastly, while BMW makes fine automobiles, they are not the first manufacturer most think of when the conversation turns to sports cars. BMW excels at sports sedans, and has a reasonable rep with their luxury line. But it's Porsche that excels at sports cars. And with these ridiculous MSRP's we're looking at these days, I think a lot more people are going to be more likely to go with who they see as a real sportscar company.

Not bashing BMW, but marketing aside, that just seems to be the way it is in the real world.

Just my .02,
Jim

Re: New Z4 sales - There's much more to it...

As best as I can remember, the Boxster outperformed the Z4 in every article and test I have read, as you point out, however the Z4 outsells it. If you think the reason is something other than the $10-20,000 price difference I think you've over analyzed it. When I was shopping I had a lot of trouble justifying, to myself and my wife, spending over 50k for an occasional use 2 seater. If the two cars had been approximately the same price I would have chosen the Boxter, as would every test driver in their summarizing comments.

Now that the two cars are closer to parity in price, a well read buyer is going to chose the Porsche, in most (obviously not all) cases, I believe. That's why I think they made a mistake.

Meanwhile they now have the 370Z roadster taking away the buyer wanting to stay in the 30's.

Re: New Z4 sales - There's much more to it...

<font color= gray>The problem I think is that its very hard to assess the "success" of the car at such an early stage, because all comparisons have to be made to a previous, and different model. And perhaps more importantly, history is clear that new car models usually sell briskly in their introductory months, often at premiums to the MSRP (not much chance of that in this case) to the people who have postponed their purchase waiting for the new and improved model.</font>

OK, when we last spoke, it was about the E89's July results in the US; +33.8% year-over-year vs. the E85-86 Z4.

NA has since released their August Sales Report. Z4 = 547 vs. 556, -1.6%. While it's still too early to make a judgement, those figures are not great for the E89, IME. August '08 was the E85-86's last month of production at Spartanburg.

<font color= gray>BMW must have expected that when you go up in price your unit sales usually go down,</font>

Earlier you said that the increase in July's sales was due to price.

<font color= gray>and I guess your saying their OK with that if their total profit contribution from the car goes up. A problem however is that with lower unit volume each car will have more overhead applied to it, shrinking the margin.</font>

True, of course; but, there are alot of things involved.

BMW's Board members have consistently said that every model/product must meet The Group's overall Return on Capital Employed (ROCE) requirments (covering fixed costs, etc.). Every bimmer, beemer, Mini & Roller has to meet them, or it doesn't get signed-off upon.

<font color= gray>Also won't German manufacturing increase the cost?</font>

This is true as well. But The Board looks at the overall Group.

Another thing they've consistently said is, Production follows market. That's why the E36/7-8 & E85-86 were built here. That was then, this is now...

While it would be cheaper, presumably, to to have BMW MC build the E89 at Spartanburg, i.e., USD-cost based, the market may no longer be *here*. To reiterate, sales of German prem. 2-seaters (Z3/Z4, Boxster/Cayman, SLK & TT), peaked in 2000; and, with a couple exceptions, like when the E85 single-handedly lifted the sub-segment in '03, BMW, Audi, M-B & Porsche have seen their sales fall rather sharply. 2008 sales for the sub-segment were down ~60% from the peak in '00. And, that's <i>with</i> the entry of the Cayman!

Production capacity is a huge expense. The E89 will probably be more expensive to build, being EUR-cost based. OTOH, Spartanburg will now have room to build the next-gen X3. The current E83 X3 is sub-contracted out to Magna-Steyr in Austria (EUR-cost based + Magna's profit margin).

Look at the total global sales for the two existing products over the past two full years, '08 vs. '07:

Z4 = 18,006 vs. 28,383

X3 = 38,835 vs. 44,421

I'd say that 'swap' alone - having a higher volume model produced at the lower cost facility - will have a significant positive impact upon profits, once the E89 & next-gen X3 are in full swing. Saving a bundle on Cost of Goods Sold (COGS), too, is a no-brainer. Agree/Disagree?

Expertise is an asset, with associated costs. Alternatively stated, not having expertise costs alot more.

I was intrigued by a recent article that said that the E89 could only be built at Regensberg...Because of their prior experience with folding hardtops on the E93 3 Series. I find it kinda curious that Regensburg would be the only place within BMW's production network that could handle folding hardtops but, these things happen, I guess.

<font color= gray>I may be wrong but I think they made a mistake, not with the car but with the pricing. Moving into Boxter pricing they will lose sales to Porsche, and will lose a large segment of people who can't or don't want to pay 60K after taxes, which I think includes a few people on this board.</font>

Sorry, but I'm gonna have to disagree. Not with the logic - that's solid, but because of Porsche's observed behavior in the marketplace. It would appear that Porsche, more than most, cater to their existing clientele. Hence, they tend to be 'Boom or Bust' among OEMs, when there are shifts in the general economy. Due to the Boxster's/Cayman's mechanical layout, it/they will always win any Road Test against the BMW competitor. However, Z3/Z4 outsell the Porsches. I don't think price <i>per se</i> will change that.

Where it might have an effect is against the SLK. Both have folding hardtops. That'll be interesting to watch.

Personally, I suspect that BMW is trying to carve a new sub-niche for the E89, like the E71 X6 & F07 5 Series GT. Forget SLK, with the E89's ugraded luxury interior, I think they might be trying to position it as an entry-level SL.

Jeremy Clarkson, in that recent video that's been floating around, said the E85 Z4 was for wife swappers. iDunno about that but, maybe the E89 Z4 is for surgeons, or those with similar demograhics ---> Buy a SL for the 1st wife/ex-wife, and an E89 Z4 for the mistress/2nd wife.

<font color= gray>We will see what happens to sales after the initial excitement wears off.</font>

See NA's August numbers. :-O

<font color= gray>Where did you find the unit sales numbers?</font>

I get 'em from one of BMW's sites. Elsewhere, NA and others post their Sales Reports on http://www.prnewswire.com/. Here's NA's August Report from last week: BMW Group U.S. Division Reports August 2009 Sales. The industry typically reports on the 1st-3rd bsns day during the month following.



As for BMW AG's worldwide sales, incl. US, it usually takes approx. full calendar week to report. Here's their press release from yesterday re: August sales (Note that Z4 sales declined by 1.6% in the US, but nearly doubled (+95.3%) worldwide):


"<b>BMW Group: Sales continue to recover in August</b>

08.09.2009 Press Release

Munich. The BMW Group sold 91,790 BMW, MINI and Rolls-Royce brand automobiles worldwide in August. The decline in sales slowed for the fifth consecutive month (prev.yr. 101,679 / -9.7%). Ian Robertson, Member of the Board of Management of BMW AG, responsible for Sales and Marketing: “We are heading in the right direction – since April we have continually regained ground month-on-month. In August the trend continued.
I am cautiously optimistic that we will be back on our growth path in the months ahead and will remain the leading international supplier of premium automobiles this year, even though we will not sell as many cars in total in 2009 as in 2008.”

BMW brand sales were 11.3% lower in August at 75,689 (prev.yr. 85,321) units. MINI sold 16,064 vehicles (prev.yr. 16,257 / -1.2%), while Rolls-Royce delivered 37 automobiles (prev.yr. 101 / -63.4%). Despite difficult market conditions, several BMW and MINI models made major gains: The BMW 7 Series grew by 21.0% (4,004 units/ prev.yr. 3,309) in the month under review, making it the clear global market leader in the luxury sedan segment. The BMW Z4 and BMW X6 models also remained on their growth path. A total of 2,469 (prev.yr. 1,264 / +95.3%) customers purchased the BMW Z4 – which is market leader in the roadster segment – in August. The BMW X6 made gains of 11.9% to reach a total of 3,049 (prev.yr. 2,724 / +11.9%) deliveries in August. Considerably more customers bought the MINI Convertible, with 2,507 units sold (prev.yr. 1,612 / +55.5%), and the MINI One (Hatch and Clubman versions), with 2,746 sales (prev.yr. 1,417 / +93.8%), than in August of the previous year.

Between January and August the BMW Group delivered 817,183 (prev.yr. 992,341 / -17.7%) automobiles worldwide. BMW sold 679,893 (prev.yr. 829,346 / -18.0%) units. Sales of the MINI brand for the year to the end of August were down 15.7% (136,879 units/ prev.yr. 162,297). The Rolls-Royce brand reported a decline in sales of 41.1% (411 units / prev.yr. 630) over the same period.

The BMW Group performed considerably better in its largest retail market, Germany. New registrations increased 3.5% to reach a total of 18,570 (prev.yr. 17,942). BMW brand sales were 1.1% (15,840 units/ prev.yr. 15,672) higher, while MINI reported gains of 20.3% (2,730 units/ prev.yr. 2,270) in Germany.

The Chinese market continued its dynamic growth as BMW Group sales climbed 63.2% (9,013 / prev.yr. 5,523) in August. Not only the compact and mid-sized BMW model series made substantial gains – the BMW 5 Series (2,768 / +70.0 %), the new BMW 7 Series (1,131 / +32.9%) and the BMW X5 (959 / +16.7%) and X6 (826 / +1,552.0%) models proved particularly popular in China. With sales of 354 vehicles, MINI also posted an increase of 61.6%. The BMW 5 Series, with 16,859 units sold (+33.6%), and the BMW 3 Series, with a total of 12,876 units (+7.3%), were the best-selling model series in China for the year to the end of August.

BMW Group sales also performed extremely well last month in Japan (2,859 / +9.5%), South Africa (1,786 / +6.0%) and Australia (1,436 / +1.3%). The BMW Group reported further growth in the Netherlands (1,485 / +25.4%), in Austria (1,093 / +19.8%), Canada (2,749 / +14.2%), Brazil (587 / +134.8%), New Zealand (115 / +59.7%), India (297 / +12.1%) and in South Korea (822 / +22.1%).

BMW Motorrad reported sales 14.4% lower than in August last year at 5,423 units (prev.yr.: 6,338). For the year to the end of August 2009, 62,001 (prev.yr.: 72,954 / -15.0%) motorcycles were delivered to customers worldwide.

BMW Group Sales in/up to August 2009 at a glance
In August 2009 Comp. to previous year Up to and incl. August 2009 Comp. to previous year.

BMW Group Automobiles 91,790 -9.7% 817,183 -17.7%
BMW 75,689 -11.3% 679,893 -18.0%
MINI 16,064 -1.2% 136,879 -15.7%
Rolls-Royce 37 -63.4% 411 -41.1%
BMW Motorcycles 5,423 -14.4% 62,001 -15.0%..."

BMW Group: Sales continue to recover in August.


Here's link to The Group's July Sales report: BMW Group with 109,923 deliveries in July"


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Re: New Z4 sales - There's much more to it...

Thanks for a great post. The problem I think is that its very hard to assess the "success" of the car at such an early stage, because all comparisons have to be made to a previous, and different model. And perhaps more importantly, history is clear that new car models usually sell briskly in their introductory months, often at premiums to the MSRP (not much chance of that in this case) to the people who have postponed their purchase waiting for the new and improved model.
BMW must have expected that when you go up in price your unit sales usually go down, and I guess your saying their OK with that if their total profit contribution from the car goes up. A problem however is that with lower unit volume each car will have more overhead applied to it, shrinking the margin. Also won't German manufacturing increase the cost?

I may be wrong but I think they made a mistake, not with the car but with the pricing. Moving into Boxter pricing they will lose sales to Porsche, and will lose a large segment of people who can't or don't want to pay 60K after taxes, which I think includes a few people on this board. We will see what happens to sales after the initial excitement wears off.

Where did you find the unit sales numbers?

Not mine, by the way.

At least one..... stay tuned.

Re: New Z4 sales - There's much more to it...

As we consider the very interesting and evolving situation of BMW's Z3/Z4 sales in the US, it might be helpful to view it in the context of, Unit Sales<->Market Shares<->Profits.

<font color= gray> According to the Wall St. Journal Thursday, July Z4 sales are up 33% from last July,</font>

+33.8%

However, that's 'apples & oranges'. The vs. #, July '08, was the E85-86 Z4, not the E89. The E85-86 was then inching towards EOP on 28 August 2008. It makes little sense to compare the results of one product's 2nd full month vis-a-vis another product's 81st full month...Yet, that's the convention.

It would be reasonable for one to expect that any new product, the E89 here, would outpace its then soon-to-be-obsolete predecessor. Consequently, is +33.8%, Hi? Lo? Or, Inline?

The way BMW looks at it is via corresponding Lifecycle periods. For example, July '09 was the E89's 2nd full selling month in the US (global, too); when 614 units were sold. OK. For the E85, its 2nd full month was December '02; when 1,689 units were sold. For the E36/7's 2nd full month, back in April '96, 2,185 units were sold.

It's been my observation that February - June are prime roadster selling months in the US. Make whatever seasonal adjustment(s) you'd care to, 614 vs. 1,689/ 2,185???

Supply is an issue as well, naturally.

<font color= gray>while the compact premium sport segment is down 25% from last year.</font>

Not sure if the <i>WSJ</i> has the right segment definition, but the Z4's main competitors are the Boxster/Cayman, SLK & TT. Premium German two-seaters, yeah?

During July, those four makers saw their sales fall 40.1% Excluding BMW, Porsche, M-B & Audi sales fell 58.7%.

Market shares -> a very useful analytical tool!

During the Z3's years, xx Feb 96 - 25 Oct 02, the market share among the four main Germans were,

41.5% - BMW
23.3% - Porsche
21.7% - M-B
13.6% - Audi

Then, during the E85-86's time, 26 Oct 02 thru 30 Apr 09 (last full month before E89's launch),

37.9% - BMW
23.7% - Porsche
24.5% - M-B
13.9% - Audi

Now, July 09 snapshot,

44.7% - BMW
25.6% - Porsche
17.0% - M-B
12.7% - Audi



<font color= gray>Most popular color, black. Average trade is a Z4 valued at $19k, avg selling price $56.6k Average deal 60 months, APR 3.8%, $811/ month. 79% male buyers, age 36-55 years of age.</font>

TFI.

<font color = gray>Will the sales continue or is this just the the guys that "gotta have it"?</font>

If it was just the US, Munich would have a problem. Fortunately (for BMW), their decisions have altered the landscape.

<font color= gray>Part of the sales increase is obviously the price.</font>

Huh?! Kindly explain.

<font color= gray>No unit sales figures were given.</font color>

614 vs. 459.


Unit Sales<->Market Share<->Profits.

Personally, and this is just me, a great way to frame this - eventhough all three are very important to every BMW product - is that the E36/7-8 was about Unit Sales; the E85-86 about Market Share; and, the E89 to be about Profits.

All three corporate issues are inextricably linked, of course. The intriguing part is BMW's modified strategy. As we all know, Z4 production has been shifted from Spartanburg to Regensberg...Why? BMW AG's corporate line has always been that, production follows market. Fine.

Another valuable analytical tool is *Take*, the percentage one particular regional market takes of total global sales. Sure enough,

E36/7-8 = 113,712(US) / 297,087(total production run) = 38.3%

E85-86, 26 Oct '02 thru 31 Mar '09 = ~38.5%

For the E89, which was launched, worldwide on 09 May '09, thru 31 July '09, 9,483 units were sold. This is from AG' perspective.

From NA's perspective, here's how many Z4s were sold in the US this year,

Jan - 45
Feb - 21
Mar - 36
Apr - 23
May - 334
Jun - 361
Jul - 614

A very nice 'pop', to be sure. OTOH, during May-July, NA reported selling 1,309 Z4s (including a few E85-86 stragglers), versus AG reporting selling 9,483 worldwide.

Therefore, NA's *Take* of E89s (assuming zero E85-86s), is approx. 13.8%. A far, far cry from ~38+%.

In conclusion, IMO, this goes to show: first, just how much the market for German 'zweisitzers' has collapsed in the US (-60%, 2008 <- 2000); and, second, BMW's response to go after profits outside the US, while still maintaining dominent market share in the US.

Brilliant!
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ZFest

How many new Z4s do you think will be on hand at ZFest? At the 2003 HC, just a few Z4's were there. They even had a pano photo taken of only Z4s. Only time that was ever done.

Re: New Z4 sales - Here's the answer

According to the Wall St. Journal Thursday, July Z4 sales are up 33% from last July, while the compact premium sport segment is down 25% from last year.

Most popular color, black. Average trade is a Z4 valued at $19k, avg selling price $56.6k Average deal 60 months, APR 3.8%, $811/ month.
79% male buyers, age 36-55 years of age.

Will the sales continue or is this just the the guys that "gotta have it"? Part of the sales increase is obviously the price. No unit sales figures were given.

New Z4 sales???

One poster notes that his dealer still had 3 of the 4 new z 's he received. I'm wondering what the reception to this car is in actual sales. There used to be a contributor to this forum that posted the Z4 sales numbers - is he still around??

Anyone hear any anecdotal stories about how the car is selling? Premium or discount to MSRP? My personal feeling is they have priced it too high, but this country never seems to run out of people with gobs of money.