Renowned BMW dealer to drop franchise this autumn

This doesn’t come as a surprise. BMW have made it clear in the last few years that they would be squeezing out some franchises in favour of running them themselves.

But what does this mean?
Does it mean BMW will sell their cars cheaper than the main dealor would have?
Or does it mean they finally realised how much main dealors were making and wanted that for themselves.
Also how does a business with a fifty million turnover thats €50,000,000 only make a profit of was it €428,000 or something like that?

Their overheads must be horrendous.
(do we not have an emoticon for sniggers)?

Most of the European car manufacturers have moved to a system where you have to build a garage to their exact specifications (right down to the tiles). Garages can’t sell more than one brand. You can’t even sell Audi and VW in the same garage. This means garages are moving to greenfield sites like Airfield, for example. McAllisters is one example of a garage that have moved. They used to be on the Malahide Road and sell both Audi and VW. Now they are in Airside and only sell VW. They would have had to build a 2nd garage if they wanted to maintain Audi franchise. This I know from one of the guys there.

I’d imagine it’s a similar enough deal with BMW and garages. Maxwell’s simply don’t cut the mustard in this regard.

Cars will get dearer not cheaper as a result of increased showroom costs.

You have to wonder. If they can only make that much during the peak years of the boom, in the most affluent areas of Ireland…

I’m was told before that margins on new cars are miniscule. Most of the money is made in servicing and 2nd hand market.

robd said

I would disagree to a point with that, I think that margins on New Cars are fixed (not miniscule) so they know exactly how much they are making and can’t really scam you, but they can get away with murder in the second hand market.

I think they’re around the 5% mark which is pretty small. It’s a numbers game. I think the margin in 2nd hand market is around 20% at least it’s 20% spread between what they offer and what they put it up for sale for. Negotiation would bring this down somewhat. Main dealers generally don’t sell cars that are > 4 yrs old.

Bear in mind if the garage takes a trade in they don’t take a profit until the trade in is sold. If they take a trade in on that they have to sell that to take a profit. I’m not so sure about your figures though, I would have thought lower volume “premium” brands like BMW take a bigger cut.

robd said

I would that 5% is pretty small if you are selling nissan micra’s but on a new 3 series at 50k from Maxwell Motors thats €2500 and if the buyer finances it from the dealer then its christmas for him/her them, add to that some form of payment protection and a few optional must haves for the new car and wheyhey here we go here we go here we go.

Surely if you’re running a business, keeping your profits low is a good thing? (even in 12.5% corporation tax Ireland)

I’m sure the Directors’ pension/company car/expense account is being topped up nicely with any excess cream.

CSO reports new car registrations down 23% on same month last year.

Local Gossip Cork

Car (BMW) Salesmen have been told to accept any offer on BMWs on or over cost price and to shift them ASAP

From the horses mouth.

Cellopoint said

Thats the whole point of what I am saying, we can guess what they are doing but the miniscule profit makes it so obvious they are creaming it right left and centre. I would also say that the biggest cost is the rental of the property.

Superpiper said

Reasons - Change to new VRT and Road tax rates shortly so the petrol cars will become on the whole more expensive than the diesels, economic downturn, no walk in business as there was last year etc etc.

In what other advanced country does a car salesman get to be “renowned”?

Renowned poet or historian maybe. Renowned artist or scientist, I understand. But renowned buy-low sell-high car dealer? Gimme a break.

What a bunch of rednecks we are. :blush: