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      11-06-2015, 05:27 PM   #75
Law
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Quote:
Originally Posted by TheBingoBalls View Post
If BMW can keep sales within the BMW marque, that's fine and that's what you want. The problem with GM and the various brands is you had to keep profits up for each entity. That didn't happen. Saturn, Hummer, Pontiac all suffered because there were similar cars outside of those companies. While it may look good for GM as a whole (profit stays under the corporation), the financials for those companies suffered, eventually leading to shutting down those operations.

BMW on the other hand, even if they're competing with each other, BMW can only profit. Before the Gran Coupe, the 3er got 100% of the sales. Now it could be 2:1 and maybe even 1:2 3er to 4er GC. BMW just lost 3er sales, but they just easily made a profit on the same car that had a premium and retained all that profit under the BMW marque. There's almost no loss for BMW doing what they're doing.

Every company has their ups and downs, so let's not over exaggerate and blame all these models when BMW has a slow month. What is happening is one of two things:

1. BMW captures customers with these derivative models while retaining their core customer (3, 5, 7er).

2. BMW sees a dip in their core line up but sees in increase in their derivative cars.

Both scenarios only benefit BMW. The only people who care are those who see that the 3er lost some sales and think its the end of the world because BMWs bread/butter had a decrease, but in reality, all they did was move over to the 4er Gran Coupe and paid a premium for essentially the same car.
Your scenarios assume that BMW models compete with themselves and themselves only. When we talk about internal competition, we mustn't forget about the external competition.
Market share only increases if the product successfully sells over another [external] competitor. Competing with another product within the same brand doesn't increase market share.

The problem with your assumption is that BMW sales figures released to the public do not differentiate between 4er GC and 4er coupe.
Thus, a hypothetical sales period that see 3er sales decrease and 4er sales increase cannot be automatically attributed to positive sales of the 4er GC.
For all we know in the above scenario, its possible the 4er coupe sold well, the 4er GC barely sold, and the 3er could have very well lost sales to marques other than BMW (i.e., Audi, MB).


So in your perfect scenario, BMW's costs are minimal because it assumes buyers will decide between 3er and 4er GC only.
But in reality there are other options from other brands, so BMW's costs will simply be exacerbated in a less-than-perfect scenario should a buyer choose a product from a brand other than BMW.


In the short-term thus far, it seems to work for BMW's bottom line.
I'm just skeptical whether this strategy is sustainable in the long-term.
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