BMW of North America is crafting a financial aid package to help U.S. dealers weather a stop-sale order on about 840,000 cars and light trucks affected by the recall of Takata Corp. airbags, according to notices sent to dealers.
In a notice distributed to dealers Tuesday, March 15, BMW said it does not have enough replacement airbags and probably won't have an adequate supply for dealer repairs on used and new vehicles subject to the recall until summer.
BMW joins American Honda Motor Co. in extending financial support to dealers grappling with the recall of some 29 million potentially faulty airbag inflators built by Takata.
As many as 25 million vehicles in the U.S. may be affected by the recalls. The airbags are being recalled because, in the event of an accident, they could deploy with excessive force, rupture the inflator, spray shrapnel and result in injury or death. The National Highway Traffic Safety Administration has linked 10 deaths to the defect.
BMW told dealers last week it is not aware of any ruptures in its vehicles that have airbags with inflators covered by the recall.
The financial aid package in the works will cover approximately 840,000 vehicles in the United States that BMW is recalling to fix driver-side front airbags, according to a notice sent to dealers Feb. 26.
"BMW NA is developing a complete dealer toolbox including loyalty incentives, loaner vehicle incentives, lease extensions, etc. as well as a decision tree on how to prioritize these tools," the company told dealers in the notice.
BMW dealers also can no longer sell certain 2006-15 new and used 1- and 3-series cars and X1, X3, X5 and X6 crossovers identified as having potentially defective driver-side Takata airbags.
According to a BMW source, the company has held meetings with dealers to devise the aid package.
Some details of BMW's financial assistance for U.S. dealers were expected to be released Friday, March 18.
"There are many plans in the making to help our customers and our dealers get through the recall," a BMW spokesman said. "We understand the urgency, and the details are being finalized as quickly as possible."
In addition to loaner vehicles, BMW is expected to authorize dealers to use vehicles from rental fleets and reimburse them up to $55 a day for those vehicles, according to a source briefed on the matter.
In the February notice, BMW advised dealers that customers with recalled vehicles from the 2012 model year and newer be put into loaner vehicles and "customers with [2011 model and older] ... vehicles may be offered off-lease loaners in lieu of a rental vehicle."
BMW also is paying dealers additional money for 2016 models they put into the loaner fleet to aid with the recall: $1,500 for 2-series, X1 and i3 REx extended-range vehicles; $3,000 for 3- and 4-series models; $4,000 for X3 and X4 crossovers; and $4,500 for the 5-series sedan and X5 and X6 crossovers.
The recall support allowances "will help to offset both registration and depreciation expenses," for the service loaner vehicles, BMW told dealers in the February notice.
BMW has told dealers it also will pay between $400 and $650 a month -- depending on the vehicle and its age -- in floorplan assistance.
The company also will pay $300 for the inspection of certified used vehicles and $200 for noncertified used vehicles once the stop-sale ends.
BMW is promising to "offer special low APR" rates on all affected 2012 and newer models after they are repaired.
In a related matter, Mercedes-Benz said it also is working out a reimbursement plan for dealers. Just 475 vehicles in dealer inventory have been affected by a stop-sale order because of the Takata recall, according to a Mercedes spokesman.
They include 2004-15 Mercedes vehicles and 2007-14 Daimler vans.
Mercedes-Benz USA will help dealers offset flooring and depreciation related to the recall, according to the spokesman. It also will allow dealers to take affected vehicles in on trade, he said.