BMW's Recent Business Decisions Have Been, Interesting

Can Kuhnt get BMW back on track? 

BMW's new U.S. chief tasked with taking the brand to the next level

With sales in decline and dealers clamoring for more balanced inventory, including more hot crossovers, BMW's new U.S. chief faces a big test: Can he get the brand growing again?

Dealers say they need fresher products, a better car-truck mix, competitive lease rates and a return to the days when BMW's "Ultimate Driving Machine" tag line resonated wholeheartedly with consumers. They're looking at Bernhard Kuhnt, CEO of BMW of North America as of March 1, for help.

Some dealers and analysts say BMW and Kuhnt should look at how customer perception of the brand has changed. For example, in Kelley Blue Book studies and surveys, 29 percent of respondents say they will consider buying a BMW, higher than for any other luxury brand. But in new-vehicle shopping activity tracked by KBB, BMW trails Lexus, Mercedes-Benz and Audi, in that order.

In 2016, as its U.S. volume tumbled 9.5 percent to 313,174 vehicles, the BMW brand lost the U.S. luxury sales crown it had held for four of the five prior years, falling to third behind Mercedes-Benz and Lexus. It was the biggest decline among luxury brands for the year — as BMW's incentives soared 26 percent, according to Autodata.

Even the brand's most recent sales title, in 2015, was marred by reports of BMW "punching" vehicles, a practice in which automakers ask dealers to self-register vehicles as loaners. Even though BMW finished No. 1 in reported sales among luxury brands in 2015, it came in No. 3 in U.S. vehicle registrations that year, behind Lexus and Mercedes.

One U.S. dealer wants Kuhnt to reconcile the reality of what he calls "punchgate" and BMW's production-driven culture against the market's natural demand for BMWs and the state of the dealer network. That will better position him to strengthen the brand, said Steve Kalafer, owner of Flemington BMW in Flemington, N.J.

"It went from the car company of the ultimate driving machine to the company of the ultimate check-the-boxes-and-let-us-report-what-makes-Munich-happy," said Kalafer, a BMW dealer for 40 years. "They've all been subordinated to the need to report a number, no matter how unreal that number is, and the customers have found out. Now they come in and say: 'Is this a punched loaner car?'"

(AutoNews.com)