BMW has a halo headache in the 8 Series
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March 22, 2020 12:00 AM

BMW has a halo headache in the 8 Series

Urvaksh Karkaria
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    The 8 Series is positioned against the high-end Mercedes-Benz coupes and convertibles.

    For some of BMW's U.S. dealers, the brand's luxurious 8 Series coupe has turned from halo sports car to financial headache.

    Retailers complain the car has received inadequate marketing support, while an abundance of configurations have left some dealership lots with unsold inventory of the high-value model, putting pressure on floorplan expenses.

    The 8 Series has the highest day supply of any BMW model, dealers report.

    "It is the best car that no one knows about," said one U.S. retailer, who asked not to be identified.

    BMW declined to discuss the dealer complaints and doesn't provide information about product marketing costs or inventories.

    But dealers aren't too keen on sitting on that high-dollar inventory. The sticker on 2020 models tops $155,000. The interest expense on each 8 Series is $400 to $500 a month, another dealer said.

    "It's heavy metal that nobody wants to carry," he said.

    As of early March, there were more than 2,000 8 Series vehicles sitting on, or on their way to, U.S. dealership lots, according to dealer inventory data shared with Automotive News. Of those, more than 700 were "Priority 5" — a classification of vehicles dealers are looking to offload to other retailers.

    "It's very concerning and alarming that on a halo — brand-new vehicle — roughly a third of the total available on-ground inventory is being put in a Priority 5 status," said another dealer who asked not to be identified. "Basically, dealers are saying, 'I don't want this, I can't sell it, somebody please take it from me.' "

    Under pressure

    In 2018, BMW revived the 8 Series nameplate after two decades with the launch of a coupe. Since then, a convertible and four-door Gran Coupe have been added to the lineup.

    The Dingolfing, Germany-made 8 Series is positioned against the high-end Mercedes-Benz coupes and convertibles.

    BMW sold 4,410 8 Series in the United States last year.

    The 8 Series launched at about the same time as the X7 crossover, a "monumentally important" vehicle for BMW, said Ed Kim, analyst with AutoPacific.

    With limited marketing budgets, automakers typically direct their advertising firepower toward high-demand crossovers.

    "The X7 is an incremental product in BMW's lineup that competes in a heavily contested field," Kim said. "Whereas, the 8 Series, as a coupe, has an inherently short shelf life."

    The 8 Series is offered in the U.S. in as many as 15 configurations, which may have contributed to some dealers over-ordering the cars.

    "If there's 10 customers and you're offering them 15 choices, there's going to be a lot of cars sitting around," one of the dealers said. "But if there's 10 customers and you offer them two choices, you're going to sell every one and make some money."

    ‘Targeted approach'

    On the subject of marketing support, BMW spokesman Phil Dilanni said the automaker has taken a "targeted approach" in marketing to high-net-worth customers.

    The 8 Series Convertible had its world premiere at the 2018 Los Angeles auto show, while the M8 Gran Coupe debuted at the 2019 show. The model has been included in BMW consumer driving events, such as the Ultimate Driving Experience and M Track Days.

    BMW has been planning a national multimedia marketing campaign around the 8 Series that was to start next month. But that has been postponed in the wake of the coronavirus pandemic.

    For many dealers, a marketing push on the 8 Series can't come soon enough.

    "So far, what I've seen is an email blast to all my 6 Series customers," one of the dealers said, "and they are not going to buy this car. So I still haven't seen the proof in the pudding."

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