BMW of North America recently named Bernhard Kuhnt as its new CEO and the executive is facing a series of challenges to return the German brand to its former glory.
According to Automotive News, BMW's U.S. sales declined 9.5 percent to 313,174 vehicles last year, while incentives climbed a staggering 26 percent. The sales drop cost the automaker the luxury sales crown and the brand finished third behind Mercedes and Lexus.
While 2016 was definitely a bad year, 2015 wasn't much better. Even though BMW sold the most luxury vehicles in the United States that year, it came at a high cost as the company reportedly juiced its numbers by having dealers register vehicles as loaners to boost its sales.
The practice, known as "punching," hasn't set well with dealers; for example, Flemington BMW owner Steve Kalafer told the publication: "It went from the car company of the ultimate driving machine to the company of the ultimate check-the-boxes-and-let-us-report-what-makes-Munich-happy. They've all been subordinated to the need to report a number, no matter how unreal that number is, and the customers have found out. Now they come in and say: 'Is this a punched loaner car?'"
Moreover, dealers say they need fresher products, a better car-truck mix, competitive lease rates and a return to the time when the brand's "Ultimate Driving Machine" motto resonated with consumers.
Despite the challenges, BMW has a number of new products in the pipeline that should help increase sales. The 2018 X3 will arrive at dealerships in November and it will eventually be joined by the redesigned 3-Series and the all-new X7.
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