BMW's make meeting at the NADA Show identified three major issues of focus for 2020: dealer profitability, the complexity of factory programs and marketing plans.
BMW dealer profitability last year was at its highest level since 2015, BMW Executive Vice President of Operations Shaun Bugbee told Automotive News after the meeting.
The outlook improved last year, but more can be done, said BMW National Dealer Forum Chairman Patrick Womack.
"We've addressed some of the low-hanging fruit with things we can work on and fix immediately," he said. "And then there's some higher-hanging fruit that we are still working on."
Loaner-car expense and liability exposure is straining retailer balance sheets, dealers said in the meeting. Reimbursement from the manufacturer for the daily rentals hasn't increased in many years, said Womack, general manager of Laurel BMW of Westmont in suburban Chicago.
"The cars are more expensive and depreciating faster. We are bearing a lot of that cost," he said.
Over the past two years, BMW has made enhancements to the program in terms of additional incentives and other tweaks that make it "more palatable" for the stores, Bugbee said.
To drive foot traffic into stores and lift dealer profitability, BMW will ramp up marketing spending.
"There has been a commitment from BMW that they're going to create more noise around the brand and drive people to our stores," Womack said.
Factory executives and dealers expressed optimism for the year ahead.
They have reason to be. BMW had a banner year in 2019, besting German rival Mercedes-Benz to take the luxury sales crown. BMW delivered 324,826 vehicles in the U.S. last year, up 4.4 percent.
This year will be another positive year for the brand, Womack predicted.
"We have some good wind behind our sales, both with the relationship with the factory and the product," he said.
The momentum is expected to continue — BMW will have 12 new products in 2020, starting with the 2-series Gran Coupe.
"We feel we have our mix in the right spot between cars and crossovers," Bugbee sad. "We expect to grow more than the premium segment. The goal will be to gain market share.
"We had a phenomenal 3 series year last year, and we are bullish on the 2 Gran Coupe," Bugbee said. "A high-performance sedan still has a space in the market."
Three new battery-electric models — the i4 sedan and iX3 and iNEXT crossovers — are expected to go into production in 2021.
Electrification will require dealers to make investments in EV charging equipment and in expanding the power supply at the store.
BMW is working on infrastructure plans with dealers in time for the first EV's U.S. arrival. Bugbee said it is too early to tell whether dealers will receive financial incentives to offset the cost of the upgrades.
"What we are going to do first is the assessment, to see how much it's going to cost," Bugbee said.
