BMW of North America LLC will provide low-interest loans to BMW dealers who need to expand their stores or build new ones. It also vows to be flexible on its dealership guidelines to help retailers who face expansion obstacles.
The automaker is pressing dealers to upgrade their stores because it predicts increased volume in the next five years. Most BMW retailers already have made investments in their stores, and BMW has not insisted on specific changes.
But the company told dealers at their make meeting that it would provide financing at low rates if they want to upgrade.
Asked how attractive the BMW loan rates were, dealer council chairman Frank Ursomarso said, "Dirt cheap."
BMW also assured dealers it would provide more resources for dealership training in preparation for an expanded product line. In the next two years, BMW plans to introduce a 6-series coupe, a small X3 SUV and a 1-series car, in addition to the new-generation 5-series that it will launch this year.
"The business is really growing and I think dealers have done a good job of keeping up with it," said Ursomarso, president of Union Park BMW in Wilmington, Del. "But there will be a need for more service bays, more floor space for a lot of us."
He estimated that about 20 percent of the dealer body, or about 70 dealers, have not made dealership improvements as volume increased in recent years. As recently as the late 1980s, the franchise had 430 dealerships selling fewer than 100,000 cars. Last year, BMW sold about 232,000 vehicles through 340 retailers.
At the franchise meeting, BMW also emphasized the importance of being able to sell more used cars. Last year, the franchise sold 55,000 vehicles through BMW's certified pre-owned program, and the company said that volume will increase as more cars come off lease. About half of new BMWs are retailed through leases, according to Tom McGurn, BMW general manager of retail and industry relations.
McGurn said BMW has not asked dealers to comply with strict guidelines on dealership architecture or appearance as they upgrade. "We recognize that situations differ from market to market, and we've told the dealers we will work with them to get things done. Some of them face local zoning problems. We'll work within their limitations. If that means we'll have to consider alternative ideas or have satellite service locations, we'll look at that."