This article was reported by Amy Wilson, Jamie LaReau, Hannah Lutz, Arlena Sawyers and Nick Bunkley. It was written by Nick Bunkley.
As the U.S. auto industry roared toward a record-breaking finish in 2015, BMW, the top-selling luxury brand for three of the four previous years, was clinging to a 553-vehicle lead over Mercedes-Benz. Surging Lexus was threatening to leapfrog both.
But BMW wouldn't leave this race to chance. A Nov. 30 memo dangled $1,000 bonuses for each 2015 3-series vehicle dealerships sold to themselves as a "specialty demo" -- but the offer was valid that day only. The next round of industry sales reports, released the following afternoon, showed BMW's edge over Mercedes had quadrupled.
A month later, on the day automakers closed their books on the year, BMW made a stronger plea. It tripled the demo-vehicle offer to $3,000 on some models, including 2016s. "TODAY is the LAST OPPORTUNITY," it urged dealers in a memo obtained by Automotive News.
BMW ended 2015 in first place by 1,422 vehicles, the slimmest margin of victory since 2000. But when IHS Automotive collected registration data from each state, BMW's win appeared hollow. About 5,000 more new Lexuses had been registered last year than BMWs. On that basis, BMW had fallen to third.
BMW, which said thousands of vehicles its dealers sold in December were registered in January instead, is not the only automaker employing creative strategies to pump up performance. As U.S. new-vehicle sales appear to be near their peak after the longest period of expansion in nearly a century, dealers across the industry face mounting pressure.
Among the most common appears to be a practice called "punching" -- dealers buying vehicles from their own inventory and converting them into testers or loaners in order to earn hefty bonuses. In some cases, the vehicles might simply languish on the lot, eventually showing up in the dealer's used-car inventory with virtually no miles on the odometer.