NEW YORK -- The touchy subject of pressure from automakers to “punch” cars at the end of the month drew a rueful acknowledgment from BMW of North America CEO Ludwig Willisch at an industry event today.
In a panel at the National Automobile Dealers Association-J.D. Power Automotive Forum here, Willisch conceded that at the end of 2015, “there was a lot of pressure, not only by us” to rack up sales numbers.
In the U.S. last year, BMW won its fourth luxury-sales crown in five years. The 2015 race was tight until the end. BMW finished 2015 with luxury sales of 346,023 vehicles, followed by Lexus with 344,601 and Mercedes with 343,088.
However, Lexus was tops in U.S. vehicle registrations last year with 340,392 vs. BMW’s 335,259, according to IHS/Polk data.
Dealers have cited strong suggestions from some automakers to self-register cars as loaners, a practice known as “punching.” The cars are later sold as used with little mileage on them.
It’s not an ideal practice, Willisch added, “but it happens.”
Joe Eberhardt, CEO of Jaguar Land Rover North America, said the solution to month- or year-end punching binges lies in spreading sales out more equally. Currently, he said, customers have been conditioned to expect generous discounts at the end of a sales period.
“Customers wait for the deals,” Eberhardt said. “We have to change customer behavior.”
Both executives also said that attracting millennial shoppers is critical for success -- a goal that requires a more open, customer-directed sales process and product customization, Willisch said.
He said that in the U.S., there are about 750,000 millennial households with incomes of $150,000 or more, making them potential luxury buyers.
Winning their loyalty is the key to survival, Willisch added: “The companies that are most successful in reaching millennials, in transforming them into lifelong drivers, are the ones that will still be here in 50 years.”
Automotive News staff contributed to this report.
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