"Affluent customers generally ride out recessions OK, but specific market volatilities can directly affect the premium vehicle market, and that's what we're experiencing right now," Bilgeri wrote in an email.
Strong sales growth "won't happen again until energy and the equity markets stabilize and business confidence improves," he added. BMW's expansion of the Spartanburg, S.C., plant, which will increase its supply of crossovers, and of its distribution network for imported vehicles speak to the company's confidence in long-term U.S. prospects, Bilgeri said.
AutoNation, the largest U.S. new-vehicle retailer, warned in early January that there was a bulging inventory of unsold cars, especially luxury models. Late last month, Group 1 said it planned to cut orders, particularly for luxury cars, and claimed BMW, Mercedes and Audi each had more than 90 days of supply at its stores.
When asked about the number of days supply or whether BMW was now suffering from the after-effects of trying to win the sales crown, spokespeople for BMW declined to comment.
The German company attributes the problems to an environment last year in which luxury car exporters, enticed by a strong dollar that lifted profits back home, attempted to compensate for weak Chinese demand by allocating more and more vehicles to the U.S.
The problems in the U.S. alarmed some analysts who attempted to extract more earnings guidance from management than BMW was willing to provide.
"You have added the U.S. to the risk section in your outlook statement and taken out Russia, but of course if the U.S. starts slowing for BMW that will have a much bigger impact on your numbers," said Evercore ISI analyst Arndt Ellinghorst during the call, unable to coax an outlook for the second quarter from the CFO.
In its interim report, BMW warned of a "trend towards deteriorating financing conditions" in the U.S. car market, estimating overall industry sales growth will drop to a rate of 1.3 percent from last year's 5.7 percent. This should bring the market to 17.7 million for the year, the company said.
BMW is now pinning its hopes on a strong second half, during which it will complete the three-year expansion of its SUV production capacity that costs $1 billion. By the end of this year, the South Carolina plant, now the company's largest worldwide, will total 450,000 annually. Additionally, Krueger said imports from Germany of its X1 and 7 series should help boost U.S. sales.