BMW of North America sent U.S. dealers too many sedans and not enough crossovers in a market that was clamoring for utility vehicles last year, says Timothy Kraemer, head of the BMW National Dealer Forum.
The brand's sales declined last year after hitting a record and claiming the import luxury sales crown in 2015.
Dealers had too many 3-series and 5-series sedans and not enough X1, X3 and X5 crossovers, said Kraemer, general manager of BMW Minnetonka in Minnesota.
Further complicating the problem was the competition with newer crossover entries while BMW's X3 was nearing the end of its life cycle, Kraemer said. The competition also has full-size crossovers, such as Audi with its Q7 and the Mercedes-Benz GL, while BMW dealers have to wait more than a year for the all-new BMW X7, he said.
New product is coming, a redesigned X3 this year and the coupelike compact all-new X2 in 2018, he said. With those models, "you will have a well-rounded group," Kraemer said.
The redesigned 5-series sedan goes on sale in February, but BMW will face the same problem Mercedes-Benz has with its relatively new E class.
"There is a lot of competition in the sedan especially in that price point," Kraemer said. "We are not living in sedan times."
The good news is that dealers won't be saddled with cars they haven't sold that were counted as deliveries to a customer, he said. BMW dealers called the punching practice "punchgate," and had expressed their concern about artificially inflating sales, Kraemer said.
"BMW has acknowledged and addressed the issue and is not continuing the practice of reporting cars that don't go home with a retail consumer."
The lingering effect is that many of those cars are still on dealer lots.
"It takes time to right-size it because you can't make those cars go away overnight," Kraemer said. "But the overall idea of not punching cars is to report real actual sales and not have a two-tier price environment, and they are working toward that."