Re: Bastard Child and Decided Child (LONG)

[John Firestone <john.firestone@xxxxxxxxxxxx>]

Scott Miller writes:
> 
> I'm kind of having a hard time reconciling the "bastard child" status
> coment with the fact that BMW sells over 100,000 cars in the U.S. every
> year (at least recently).  I'm just curious, how many cars do they sell in
> "legitimate child" Germany, where they get all the go-fast, look-kewl
> goodies?
> 

The figures from mot 17/1998 for the first half of the year are:

    Market share   Model   Sales 1/98-6/98   Change from 1/97-6/97

        3.0 %       3er        59 146               -0.9 %
        2.4         5er        47 128               +6.1
	0.4      Roadsters      8 683              -14.2
	0.3         7er         6 455               +2.9
        =====                 =======              =======
        6.3         BMW       121 536               +0.8 %

Overall, BMW's home market is somewhat larger than twice the U.S.
market.

> I know part of this has to do with emissions and safety certifications for
> the different combinations.  If they can't sell enough of something here,
> the certification cost is not justified.  Still, in Germany you can order a
> Bimmer using a mix-and-match approach to the options to a much greater
> extent than we can in the U.S.  Even our entry level 318ti isn't all that
> "entry-level", compared to the Euro version, right?

I have my doubts that emissions and safety certifications are the
first things that preclude options for the U.S.  For example, BMW NA
probably doesn't need to crash test a vehicle for each climate control
system they wish to offer.  Yet a German customer can choose from
three while an American customer must accept just has one.

The unit that American customers must accept, however, is the top of
the line model. As Scott wrote, one reason there is a much smaller
choice of options on U.S. cars is that an American customer get many
options in the base model that a German customer must pay for. But
that begs the question: Why are options mix-and-match in Germany and
take-them-or-leave-them in the U.S.?

I think it may have a lot to do with the way people on the two
continents buy cars.  New car buyers in Germany usually spend months
on the project.  They decide every last detail they want, place an
order, wait patiently for six weeks or more and then take delivery of
what they have ordered.  And they really do.  A customer normally
signs the worksheet before the order is placed; thereafter, he expects
to reimburse the dealer for their costs should he change his mind.
Customers in Germany have firm expectations of what they are buying
and dealers have firm expectations of what they are going to sell.

Contrast this with new car sales in the U.S. From what I have read and
heard, most people won't want wait months for delivery and they are
willing to compromise. It is not unusual for people to buy a car on
sight or to take certain options on speculation or to take a car with
options they don't need.  However, after foregoing some choices and
placing an order, customers in the U.S. expect a great deal of
flexibility. People expect that they may change their minds after an
order has been committed or even to refuse a car after it has been
delivered to the dealer. I am told that when a model is in short
supply, it is not unknown for someone to place orders with several
dealers, accept the first that comes in and refuse the rest. And most
importantly, in all of this, customers expect they will not have to
reimburse the dealer or BMW NA for the costs of changing their minds.
The upshot is that customers in the U.S. have flexible expectations of
what they will eventual buy (and from whom) and dealers have flexible
expectations of what they will sell (and to whom).

If I am not terribly mistaken (and please say so if you think I am
wrong), a German market BMW is built for a particular individual; a
U.S. market BMW is built for one of many candidates. The first permits
mixing and matching of options and encourages a more unique, if not
individual, car.  The second allows only generic options and option
bundles, but accommodates sales to a more general customer.
Admittedly, both the German and U.S. markets are becoming more like
the other, with BMW NA testing an "Individual" program and BMW's
German subsidiaries offering option packages (e.g. the sport, comfort
and luxury editions). I suspect, however, that the different
expectations of the final customer continue to make new car options
mix-and-match in Germany and take-them-or-leave-them in the U.S.

Which leaves me with one final question: Could the short list of U.S.
options be a perverse consequence of the customer always being right?
I drop the idea and pass on.

- -John
'96 318is
john.firestone@domain.elided

------------------------------