Bmw doesn’t want to increase customer discounts just to overtake Lexus, Mercedes-Benz

Article by Christian Andrei, on November 18, 2010

As we enter the final weeks of 2010, BMW AG refuses to raise its customer discounts just to be named as the year’s top-selling US luxury automobile brand. Peter Miles, executive vice president of operations for BMW's North American unit, said that the company is after profit more than it is after volume. In October, Toyota Motor Corp.'s Lexus got the coveted No. 1 spot.

The last time that it held the top position was in May. Lexus is feeling the pressure to maintain its lead as its sales fell due to Toyota’s recall crisis and as it faces competition from the new products from BMW and Daimler AG's Mercedes-Benz division.

Autodata Corp. revealed that the average cost of incentives on Lexus cars in the US increased to $3,746 in October from $1,121 the previous year.

Meanwhile, incentive spending on Lexus trucks rose to $2,810 from $696. Autodata also reported that BMW decreased its incentive spending by 39% last in October to an average of $2,926, while Mercedes dropped its spending by 3% to $3,879.

For the first 10 months of the year, BMW's incentive spending fell 27% while Mercedes dropped 30%. Traditionally, BMW spends most of its incentive money on subsidizing leases, according to Jesse Toprak, vice president of industry trends at TrueCar.

He said that in 2010, BMW was able to control their incentives while still being able to offer attractive lease programs due to the recovery in the leasing markets. [via autonews - sub. required]

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