Anyone looking to buy a BMW on a budget could be in luck in a few months from now after the company registered hundreds of demonstrator models and company cars to help prop up its reported sales numbers in April.
A glut of low-kilometre near-new used cars are expected to flood BMW dealers in the coming months after being cycled briefly through the company’s head office.
It means that buyers will likely get a sharp deal on a low-kilometre demonstrator or ex-company car in the coming months.
The unintended consequence of such a large scale injection of these cars is that it will likely dent sales of brand-new BMWs over the same period.
Industry estimates claim BMW registered approximately 300 company cars and 400 so-called “demonstrator” models across its dealer network – accounting for more than 40 per cent of the vehicles it reported as sold in April – a much higher ratio than the industry norm.
Without these extra ‘sales’, BMW would have declined by about 45 per cent in April rather than by just 5.7 per cent.
While it did not confirm or deny the figures, BMW told The Australian newspaper that it reported fewer “demonstrator” models and company cars than the same month last year.
However, figures supplied by BMW after this story was published revealed that the German car company sold a higher proportion of dealer demonstrator models and company cars in April 2020 than it did in April 2019.
Combined, the figures amount to 703 demonstrators and company cars in April 2020 versus 638 demonstrators and company cars in April 2019.
The figures are significant because they relate to vehicles that will appear on the used market sooner than cars sold to private buyers.
Dealer demonstrators and ex company cars are also used as a way to stimulate sales and boost dealer stocks of near-new used vehicles.
For added perspective and transparency, the figures supplied by BMW after this story was published showed in April 2020 the German brand sold more "demonstrator" models than mainstream manufacturers such as Mazda, Kia, Volkswagen, Ford, Nissan, Hyundai, Isuzu, Mitsubishi, and luxury rivals Mercedes-Benz and Audi.
Only market leader Toyota put on more demonstrators than BMW last month, according to confidential industry data obtained by CarAdvice. However, with more than 200 showrooms, Toyota's figure amounted to an average of approximately two cars per dealer.
Australia's new-car market fell by 48.5 per cent in April – the biggest month-to-month decline since records were kept. It was also the weakest April result in more than 30 years.
Most of the Top 15 car brands posted declines of between 45 and 65 per cent compared to the same month last year, as the coronavirus lockdowns slammed the brakes on new-car sales even though showrooms were allowed to remain open.
The April results for BMW’s rivals such as Audi (down 63.6 per cent) and Mercedes-Benz (down 54.4 per cent) slumped at a greater rate than the rest of the market, as the luxury sector continued to struggle during the 25th month in a row of sales slowdowns.
UPDATE: After this article was published, BMW released internal figures which showed it sold 973 cars to private buyers in April 2020 versus 1137 for the same month the prior year, a decline of 14.4 per cent versus the 47.6 per cent decline in private sales across the industry.
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