BMW last year defended its U.S. luxury sales crown for the third consecutive year.
It wasn't easy. The German automaker fended off a serious challenge from a surging Tesla while also navigating the industrywide supply chain shortage more deftly than its conventional rivals Mercedes-Benz and Lexus.
"Day supply throughout 2021 was in the low teens," BMW National Dealer Forum Chairman David Sloane told Automotive News. "There was never much ground stock at any point in the year."
That required BMW dealers to start preselling into the pipeline.
"We might not have an X5 or an X3 on the ground, but we have several in our order bank," said Sloane, president of Sloane Automotive Group in suburban Philadelphia. "Trying to sell that to a customer without them even being able to see or test drive a car right was a challenge."
But Sloane credits BMW for managing the chip shortage better than some competitors.
BMW had the right quantities of semiconductors committed early on for 2021, BMW's global sales chief Pieter Nota said in January.
"We have entered into a direct agreement with chipmakers to secure several million semiconductors per year," Nota said.
Meanwhile, the factory did a good job keeping dealers informed about inventory headed their way.
"We can't sell a 5 Series if we don't know whether it will arrive in six weeks or 12 weeks," Sloane said. "When push came to shove, they were able to get us the cars better than other brands."
Sloane, 36, spoke with Staff Reporter Urvaksh Karkaria about the vehicles, challenges and opportunities BMW dealers should expect this year. Here are edited excerpts.
Q: What are the top issues on the dealer forum's agenda in 2022?
A: The evolving role of the dealer as the digital journey becomes more central and desired by the consumer.
We want the local dealer in their market to be prioritized when it comes to online sales leads.
Encouraging the customer to engage initially with their local BMW center will ultimately make it a better experience for them. We don't want a customer to have to travel 100 miles to get the car they want.
Even if the local dealer doesn't have a model in stock, they can trade with other dealers for the car, or order the vehicle the customer is looking for.
How is the inventory crunch affecting other dealership operations?
Supply chain shortages last year causes difficulty in getting stock orders to the dealers, so that put a strain on our service departments. The limited supply of new vehicles also put pressure on service loaner fleets. Our loaner fleets have been depleted of new cars.
Every new unit is being sold to a customer, which is a very healthy business model.
BMW made a recent change at the request of the forum and now is allowing dealers to add late-model, pre-owned vehicles into their service fleets.
We have to continue to creatively work together to ensure the cost burden of maintaining these fleets does not shift solely to the dealers.