By Andrew Ganz
Wednesday, Aug 15th, 2012 @ 5:14 pm
 
A new report alleges that BMW gave dealers in the United States kickbacks as high as $7,000 per car last month to artificially inflate its sales figures so that the German automaker would beat its arch rival, Mercedes-Benz.

The Wall Street Journal says that, on the last day of July, BMW offered dealers up to $7,000 per car if they marked some of their vehicles as "sold." According to the newspaper, some of those falsely-marked vehicles are still sitting on dealership lots waiting for buyers.

The spiffs ranged from $2,500 for a 528i to $7,000 for a 7-Series. The automaker's volume model, the new-for-2012 3-Series, was subject to a $3,200 kickback. The deals were marked as discounts for demo vehicles, or those that are used primarily for test drives but are later sold with more than just standard delivery mileage on the clock. Nearly every automaker offers dealers discounts on demo vehicles so that regular inventory cars don't have to be used for test drives, but a single-day sell-off is essentially unheard of.

That 3-Series' discount is perhaps the most troubling. Although BMW has stated that the modest sales figures its new 3-Series has posted so far this year - including the 7,653 it reported as sold last month - are caused by limited supply, it seems unusual that the automaker would see fit to drop hefty rebates on its freshest model.

Sales of the 3-Series were down 11.4 percent last month to 7,653 units. So far this year, they're up about 3.6 percent in the U.S., although the new model didn't go on sale until spring.

On BMW's sales sheet, it's the 7-Series that raises the biggest red flag. Sales more than doubled last month to 1,696 units compared to 656 last year. Overall, BMW says that it has sold 7,300 7-Series sedans in 2012, which means that nearly a quarter of all of the $75,000-plus sedans were "delivered" last month.

BMW dealers interviewed by the newspaper said that BMW of North America wanted to clear room for incoming 2013 models, although most of those won't arrive for at least a few more weeks. A salesman suggested to the paper that the alleged tactic was more about BMW of North America inflating its sales figures in order to receive a larger allocation from the automaker's home office in Germany, however.

"Everybody is fighting for allocation," salesman Justin Wong said. "If you don't sell the cars in North america, they're going to send them to China."

Globally, last month was the automaker's best-ever July; it delivered 135,537 cars world-wide across its BMW, MINI and Rolls-Royce brands.

Despite the alleged padding, BMW still trails Mercedes-Benz so far this year in the U.S.