MILLVILLE, N.J. -- BMW will continue cutting U.S. incentive spending this year as it prepares to launch a number of key products.
“We're not convinced we can keep the current level of incentive spending,” said Rich Brekus, BMW's general manager of sales for North America, at a press event here Tuesday. “We are seeing an improvement in the market. The question is, can we bring incentives down because the market is healthier and the pricing is lower?”
BMW cut incentives by 31 percent last month, to $3,545 a vehicle from the year-earlier $5,140, according to Autodata Corp. Brekus said BMW's April's incentive spending was below the level of rival Mercedes-Benz.
Autodata reported U.S. incentive spending in April fell by an average of 8 percent across the industry.
Brekus said BMW wants to trim incentives in time for the brand's June launch of the redesigned 5 series, BMW's most profitable car, which is priced as much as $1,600 below the 2009 model.
“We need to keep our profits. And we will continue putting more of those profits into research and development,” Brekus said.
The 5 Series is "our most important car, profit-wise,” said Jim O'Donnell, BMW North America's boss, in an interview with Automotive News this month. “We can't wait until it arrives. The competition and the (Mercedes) E class are doing very well in this market and just seizing our share.”
Lexus sales climbed 21 percent and Mercedes-Benz sales rose 22 percent this year through April, exceeding BMW's 8.8 percent gain in a U.S. market that was up 12 percent from a year earlier.
O'Donnell has said it wants the new 5 Series, followed by the redesigned X1 and X3 SUVs coming out early next year, to propel the company to the top-selling luxury line in the United States by 2012.
Lexus has been the top-selling luxury brand in the United States for 10 straight years.
Bloomberg contributed to this report.