BMW of North America is cutting its sales projections for the near and long-term for the struggling market that includes the United States and Canada, as well as reducing the company’s North American staff by nearly 100 employees. Though BMW sales have long grown in the U.S. – 16 consecutive years of steadily increasing sales – the automaker’s New Jersey office has now turned down 44,000 BMWs that were allocated for the North American market for 2009.
Thanks to the slumping economy, not to mention the related weak dollar/euro exchange rate, BMW will send cars formerly allocated for North America and sell them in more profitable markets like Asia, the Middle East, South America and even BMW’s home market in Europe.
BMW ’s CEO of BMW’s U.S. Holding Corporation recently said that the automaker’s goals include cutting sales expectations by at least 10 percent, reducing new car incentives and cutting up to 90 jobs in North America. These aren’t revolutionary changes for the auto industry in North America – but they are for BMW, which has long enjoyed steadily increasing sales and solid profits.
The automaker hasn’t specified exactly where it expects to see fewer cars or jobs, but it has said that even the small BMW X3 s built in the company’s Spartanburg, South Carolina, plant will see a reduced number of vehicles allocated to the U.S. market. The X3 has seen a recent perk in sales, but BMW says that it’s not as profitable in the market where it’s assembled as it is overseas.
BMW’s North American office also plans to bring an expanded lineup of smaller-engined BMWs to the U.S. As we learned earlier this month, the automaker plans to bring a turbocharged four-cylinder to the U.S. and now rumors point to an even larger lineup of four-cylinder engines. BMW hasn’t sold a four-cylinder in the U.S. since 1997. It’s possible that the U.S. market might begin to mirror the Canadian market, which has long offered a smaller-displacement 3-Series than was available over the border. Currently, BMW sells a 323i in Canada powered by a 200-horsepower 2.5-liter inline-six, whereas in the U.S., BMW’s smallest motor is a 230-horsepower 3.0-liter inline-six.
Sales tactics will also change in BMW’s North American markets. The heavily-marketed December sales push, which has long been a tradition among luxury automakers, will apparently become a thing of the past for BMW. The automaker hopes that by not offering cut-rate deals on leftover ’08s and even ’09s that it will increase profitability.
