It's unlikely that carmakers will be able to maintain the current level of incentive spending and this year, BMW will cut costs like these as it gets ready to launch several key products. At a press event last Tuesday, Rich Brekus, BMW's general manager of sales for North America, said that the company expects the market to improve.
BMW is reportedly considering cutting incentives due to a "healthier" market and lower pricing. Autodata Corp. disclosed that BMW reduced incentives by 31% last month, to $3,545 a vehicle from the $5,140 a year ago. Autodata also reported that in the car industry, US incentive spending in April dropped by about 8%.
Meanwhile, Brekus said BMW's April's incentive spending was less than what rival Mercedes-Benz had spent.
He also divulged that BMW intends to lower incentives in time for the launching of the redesigned 5 series in June. The 5 series is BMW's most profitable car, which is priced up to $1,600 below the 2009 model.
Brekus added that BMW has to keep its profits, which will then be used for research and development. In an interview with Automotive News earlier this month, Jim O'Donnell, BMW North America's boss described the series as its "most important car, profit-wise."
He said that BMW is eagerly anticipating its arrival, especially since its rival, the Mercedes E class is eating into its share.