BMW's dealer relations have long been strained, so it is encouraging that BMW of North America CEO Bernhard Kuhnt -- 10 months into his job -- is taking steps to resolve problems, and that dealers are responding positively.
Kuhnt has formed working groups to look at reducing complexity in BMW's incentive programs and consider covering more of dealerships' loaner-car costs. He is also changing how chargebacks for dealership warranty audits are used — reacting to criticism that they are a revenue stream for BMW.
It's a good start and there's no reason to doubt Kuhnt is faithful in his intentions.
Still, longtime BMW dealer Steve Kalafer raises a valid point about who calls the shots in the long run at BMW. Kalafer contends that the U.S. is regarded as a "remote outpost" by the company's German headquarters — that executives in Munich set expectations and the U.S. sales team must figure out a way to meet them. Dealers have complained about a sales-driven culture, bloated inventories and "punching," the practice of asking dealers to self-register vehicles so they can be reported as sold.
In June, BMW CEO Harald Krueger made clear — talking to reporters — that he expected the redesigned X3 to regain segment leadership in the U.S. despite finishing No. 4 in the compact premium crossover segment in 2016. And "if somebody on my team is not performing to that, well, he has a problem," Krueger said.
Given that dynamic, Kuhnt will have to be persuasive with both his Munich bosses and the dealers. The most important things he can do, perhaps? Keeping inventory in check and swearing off the temptation to punch cars.
Another large-scale punching program will leave dealers feeling the old BMW is back and nothing will ever change.