BMW dealers hope their troubled relations with the factory will improve now that BMW of North America has a new boss.
Still, a lot of problems need to be solved, says Damon Shelly, chairman of the BMW National Dealer Forum and owner of two BMW stores in California.
In recent years, dealers have given the brand low marks in National Automobile Dealers Association attitude surveys. The main problems: policy changes and communication.
"In the past three or four years the manufacturer made a lot of changes to our business model, which very much impacted dealer profitability and our ability to do our jobs," Shelly said. "When you add that the changes occurred in a way that wasn't collaborative, the dealers felt they weren't listened to or heard."
Shelly said Ludwig Willisch, who was appointed CEO of BMW of North America last year, "seems to be more of a collaborator and in my conversations with him, or with the people underneath him, there seems a genuine desire to improve the relationship."
Shelly said last year was a difficult one, even though BMW sold 247,907 vehicles in the United States to become the No. 1 luxury brand.
"The new-car department was just very competitive," Shelly said. "That created margin pressure and volumes aren't back to the great old days. Many of us have made investments suited to much bigger volume levels. BMW dealers went on a huge investment binge in the early 2000s to improve facilities based on factory standards."
Dealers say new-car profit margins could improve if BMW shipped "the right product at the right place at the right time."
"For example, the cold weather states lacked all-wheel drive last year," Shelly said. "Those dealers had to compete with brands that had all-wheel drive, like Audi and Mercedes-Benz, and that ended up costing them margins."
Dealers are also miffed by last-minute incentive programs.
Shelly said: "If they were better thought out and more targeted earlier in the month, we would not be in the end-of-the month panic that we often end up in."