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2019+ BMW 3 AND 4-SERIES FORUMS (G2x Generation) Ordering / Pricing / Order Tracking Forum More incentives coming due to the COVID-19 situation?

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      04-18-2020, 09:15 PM   #23
TheBingoBalls
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Originally Posted by dhk206 View Post

Someone earlier mentioned manufacturers have no incentive to sell because factories are closed, but that's far from true. Just like the dealers and any other business, there are a ton of liabilities and cash flow is important. Obviously every company's financial situation is different so incentives and what not are going to depend on many factors.
I think the term was used interchangeably with dealers. Like you said, companies like BMWAG have their own financial situation to look after so they're not just holding onto units that have been manufactured - they're looking to deliver units to the respective regions to realize revenue at the wholesale level. In addition, BMW Financial services (all regions) contribute to over 20% of BMWAG's annual profit and you can't contribute if you don't have contracts and you can't get contracts without cars available to sell. But with that said, dealers aren't motivated to sell if they are going to be taking losses - they will sell at their own discretion but BMWAG isn't going to stop shipping cars where possible.

Two different entities: dealers (retail) and BMWAG (wholesale) can't be looked at the same.
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      04-19-2020, 07:22 AM   #24
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In addition to payroll and inventory (which you mentioned as top 2), there's rent, insurance, depreciating assets, debt, interest, etc. There's a long list of liabilities that require a substantial amount of cash flow needed to pay the bills - even though there may be little being spent on payroll.

Someone earlier mentioned manufacturers have no incentive to sell because factories are closed, but that's far from true. Just like the dealers and any other business, there are a ton of liabilities and cash flow is important. Obviously every company's financial situation is different so incentives and what not are going to depend on many factors.
Right, I was only highlighting the top 2 expenses. The other expenses you mentioned are typically much smaller in comparison.

Again I'm only trying to offer possible reasons for why we're not currently seeing deep discounts, above and beyond what's normal. It may very well change as the situation prolongs and we may see yet see those deep discounts once dealers begin feeling the pinch to liquidate.

There's an entire thread on this very topic on the leasehackr forums.
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