We know BMW is listening to us,
04-14-2005, 07:23 AM
#21
Senior Members
Join Date: Aug 2003
Location: UK
Posts: 687
Likes: 0
Received 0 Likes
on
0 Posts
Rudy,
Whilst I consider myself a true enthusiast regarding cars I take the view that they are the sum of their parts when it comes to options. I'm prepared to pay a premium for the quality of engineering relating to the drive but as far as infotainment systems and optional extras go then I think a line has to be drawn somewhere that reflects value for money and not excessive profiteering. If BMW adopted a more sensible pricing strategy then they would sell a much higher volume of equipment to a wider audience. This would allow them more money to improve the technology.
Take nav as an example. When I ordered my E60 back in June 2003 the dealer advised me that not having nav would be a huge issue come resale time. So I had to part with nearly ?1600 for the business nav (arrow only system) when I really wanted pro nav which was ?350 more expensive but was not compatible with bluetooth when the car was launched. Fast forward some 20 months to when I sold my car on and I found that only about 10% of E60's for sale as used cars in the UK dealer network are fitted with nav. I only got around ?500 more for my car due to having nav on it so I lost another ?1100 needlessly in real terms. I don't think the system was value for money in the first place and the second hand market is not putting a high value on it either.
Whilst I consider myself a true enthusiast regarding cars I take the view that they are the sum of their parts when it comes to options. I'm prepared to pay a premium for the quality of engineering relating to the drive but as far as infotainment systems and optional extras go then I think a line has to be drawn somewhere that reflects value for money and not excessive profiteering. If BMW adopted a more sensible pricing strategy then they would sell a much higher volume of equipment to a wider audience. This would allow them more money to improve the technology.
Take nav as an example. When I ordered my E60 back in June 2003 the dealer advised me that not having nav would be a huge issue come resale time. So I had to part with nearly ?1600 for the business nav (arrow only system) when I really wanted pro nav which was ?350 more expensive but was not compatible with bluetooth when the car was launched. Fast forward some 20 months to when I sold my car on and I found that only about 10% of E60's for sale as used cars in the UK dealer network are fitted with nav. I only got around ?500 more for my car due to having nav on it so I lost another ?1100 needlessly in real terms. I don't think the system was value for money in the first place and the second hand market is not putting a high value on it either.
04-14-2005, 07:24 AM
#22
Contributors
Join Date: Feb 2005
Location: CANADA
Posts: 413
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: 2011 F10 535i -Brilliant Graphite/Oyster
2006 E5004matic- I must have been on drugs when I got this car
2004 545i Black Sapphire/Truffle Brown interior
Originally Posted by ISUK' date='Apr 14 2005, 09:35 AM
Rudy,
I think we shall have to agree to disagree on this one. There is no way that BMW is not making a huge mark up on every nav unit sold.
This is not hugely complex technology we are talking about here. Nav systems have been available for years and the fall in price of after market systems shows more truth about the correct pricing of this type of product. The software conflict issue is a different problem entirely and says more about BMW's ability to integrate new technologies rather than cost issues. I have the Porsche Communication Management system (PCM) on my 997 and this manages to control the entertainment, Nav, OBC, and phone from one screen with no conflicts. All of this from a much smaller manufacturer than BMW.
The vast majority of these components, be it nav or entertainment systems, are made by third party specialist manufacturers, not the auto makers. Therefore the development costs are more evenly spread as they sell the product to a wider audience.
Technology issues aside I was merely pointing out that a lot of options are ludicrously overpriced on many cars and "premium" brand manufacturers are more guilty of this than the volume brands because they are trading on their name. I just think that they should treat their customers a little better and either increase the standard equipment tally to justify the high price tag of the car or reduce the option prices to realistic levels. It's a question of value for money. I mean ?250 for a CD changer that isn't even an in-dash set up for instance... ?? Don't forget that in real terms cars are a lot more expensive here in Europe than they are in the US.? Professional Navigation is an $1800 option in the US. In the UK it costs $3665. Base price of a 545i in US is $55,800. In the UK it is $79,800. Perhaps this fact sheds light on why I think BMW are having a laugh. Your cars get shipped halfway across the globe from Germany and you pay half the price we do. Where is the logic in that? Same car, same options, same price to build at the factory. Welcome to rip off Britain/Europe. The letter in the magazine I mentioned in my earlier post was the letter of the week so the staff and editor of the publication were obviously in agreement with the sentiment.
I think we shall have to agree to disagree on this one. There is no way that BMW is not making a huge mark up on every nav unit sold.
This is not hugely complex technology we are talking about here. Nav systems have been available for years and the fall in price of after market systems shows more truth about the correct pricing of this type of product. The software conflict issue is a different problem entirely and says more about BMW's ability to integrate new technologies rather than cost issues. I have the Porsche Communication Management system (PCM) on my 997 and this manages to control the entertainment, Nav, OBC, and phone from one screen with no conflicts. All of this from a much smaller manufacturer than BMW.
The vast majority of these components, be it nav or entertainment systems, are made by third party specialist manufacturers, not the auto makers. Therefore the development costs are more evenly spread as they sell the product to a wider audience.
Technology issues aside I was merely pointing out that a lot of options are ludicrously overpriced on many cars and "premium" brand manufacturers are more guilty of this than the volume brands because they are trading on their name. I just think that they should treat their customers a little better and either increase the standard equipment tally to justify the high price tag of the car or reduce the option prices to realistic levels. It's a question of value for money. I mean ?250 for a CD changer that isn't even an in-dash set up for instance... ?? Don't forget that in real terms cars are a lot more expensive here in Europe than they are in the US.? Professional Navigation is an $1800 option in the US. In the UK it costs $3665. Base price of a 545i in US is $55,800. In the UK it is $79,800. Perhaps this fact sheds light on why I think BMW are having a laugh. Your cars get shipped halfway across the globe from Germany and you pay half the price we do. Where is the logic in that? Same car, same options, same price to build at the factory. Welcome to rip off Britain/Europe. The letter in the magazine I mentioned in my earlier post was the letter of the week so the staff and editor of the publication were obviously in agreement with the sentiment.
[snapback]115314[/snapback]
While I agree with your comments, I would like to point out that there are some valid reasons behind the price differentials in Europe compared to the USA.
First and formost is the difference in the population, there are just so many more consumers and cars sold in the USA. With this comes competition. Next comes the currency differences which play a big role in pricing. One cannot also forget the different duty rate structure in Europe compared to the USA. Duty rates on foreign cars entering the USA are only 2.1%, I am sure they are way higher in the UK.
I have the same complaint as you here in Canada and we are next door neighbours to the USA. I only have to drive 45 mins and I am in the USA. That US $55,800.00 545 in the USA is close to CAD $ 78,000.00 here in Canada and that is for a base 545 with no extra options in it except we get the cold weather PKG standard.
Our population is a fraction of that in the USA and our duty rate is 6.1% on
foreign cars.
My complaint is that everything is extra with BMW compared to some of the competition that just seems to throw everything into their vehicles.
Just my thoughts.
04-14-2005, 07:38 AM
#23
Contributors
Join Date: Oct 2004
Location: Los Angeles. CA
Posts: 2,008
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: 2004 545i 6 spd Sports Package | NAV | PDC | Logic 7 | BT retrofit | SW V13.3
I for one do not really have a problem with the cost of the options. Ofcourse they are highly marked up. So is Pentium chip. After R and D the cost to manufacture a chip is 5% of the cost that it is ulitimately sold at. Then ofcourse DELL gets it cheaper than an individual buying retail.
In the US Pro NAV was a $1200 option. This IMO is well worth it. Ofcourse you can argue that its just a chip and costs BMW $300. I don't see that that is the oint here. I do not work for BMW and have no intention of blindly defending them, but they are running a business and not a charity. Economics 101. They charge what the market will pay or build enough to satisfy demand at a given price.
The M5 will command a big premium in its first year, much of it will go to the dealers and not to BMW. Should they not charge if someone wants to pay with checkbook in hand?
In the US Pro NAV was a $1200 option. This IMO is well worth it. Ofcourse you can argue that its just a chip and costs BMW $300. I don't see that that is the oint here. I do not work for BMW and have no intention of blindly defending them, but they are running a business and not a charity. Economics 101. They charge what the market will pay or build enough to satisfy demand at a given price.
The M5 will command a big premium in its first year, much of it will go to the dealers and not to BMW. Should they not charge if someone wants to pay with checkbook in hand?
04-14-2005, 07:40 AM
#24
Senior Members
Join Date: Aug 2003
Location: UK
Posts: 687
Likes: 0
Received 0 Likes
on
0 Posts
Gabman,
After the US and Germany, the UK is BMW's third largest market by sales volume I believe. I don't know if you have ever visited the UK or been here recently but my UK based forum users will confirm that there are simply thousands of BMW's here. You actually see more BMW 3 and 5 series on regular motorway journeys than you do mass market mid range models from Ford or GM nowadays.
We are one of BMW's most profitable world markets. The price differential between the UK and the US is not due to a lack of competition from other manufacturers I can assure you. Premium brands just charge a ridiculous amount of money for their products because they get away with it because in general we are not as astute buyers as our US friends. You would not believe how expensive some US models such as Mustangs are here compared to the US. How does $49,000 US grab you for a specially imported Mustang base model V6?
One significant difference here is that we only have Lexus to represent the high quality Japanese brands and their sales barely make a dent in MW/Mercedes/Audi territory. It's all about brand here and people will pay silly money for it.
After the US and Germany, the UK is BMW's third largest market by sales volume I believe. I don't know if you have ever visited the UK or been here recently but my UK based forum users will confirm that there are simply thousands of BMW's here. You actually see more BMW 3 and 5 series on regular motorway journeys than you do mass market mid range models from Ford or GM nowadays.
We are one of BMW's most profitable world markets. The price differential between the UK and the US is not due to a lack of competition from other manufacturers I can assure you. Premium brands just charge a ridiculous amount of money for their products because they get away with it because in general we are not as astute buyers as our US friends. You would not believe how expensive some US models such as Mustangs are here compared to the US. How does $49,000 US grab you for a specially imported Mustang base model V6?
One significant difference here is that we only have Lexus to represent the high quality Japanese brands and their sales barely make a dent in MW/Mercedes/Audi territory. It's all about brand here and people will pay silly money for it.
04-14-2005, 08:09 AM
#25
Senior Members
Join Date: Aug 2003
Location: UK
Posts: 687
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Hormazd' date='Apr 14 2005, 09:38 AM
I for one do not really have a problem with the cost of the options.? ...................I do not work for BMW and have no intention of blindly defending them,? but they are running a business and not a charity.? Economics 101.? They charge what the market will pay or build enough to satisfy demand at a given price.
[snapback]115336[/snapback]
Hormazd,
I agree with your sentiment but you might take a different view if you were living on the UK side of the Atlantic. The 320d in my sig cost $65,000 US of which $19,000 was leather, pronav, metallic paint, sports seats, 17" alloys, bluetooth, alumium trim and a couple of other extras. Still think there is no reason to be annoyed at the cost of options and the lack of standard fit equipment? I actually have a little chuckle to myself when I see some posters from the US complain about the cost of BMW's there. There are other countries in Europe that are even worse off than the UK but that is due to high local taxation which can account for over 50% of the cost of a car. In the UK however, the high prices are down to larger profit margins for the manufacturers.
04-14-2005, 09:43 AM
#26
Contributors
Join Date: Feb 2005
Location: CANADA
Posts: 413
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: 2011 F10 535i -Brilliant Graphite/Oyster
2006 E5004matic- I must have been on drugs when I got this car
2004 545i Black Sapphire/Truffle Brown interior
Originally Posted by ISUK' date='Apr 14 2005, 10:40 AM
Gabman,
After the US and Germany, the UK is BMW's third largest market by sales volume I believe. I don't know if you have ever visited the UK or been here recently but my UK based forum users will confirm that there are simply thousands of BMW's here. You actually see more BMW 3 and 5 series on regular motorway journeys than you do mass market mid range models from Ford or GM nowadays.
We are one of BMW's most profitable world markets. The price differential between the UK and the US is not due to a lack of competition from other manufacturers I can assure you. Premium brands just charge a ridiculous amount of money for their products because they get away with it because in general we are not as astute buyers as our US friends. You would not believe how expensive some US models such as Mustangs are here compared to the US. How does $49,000 US grab you for a specially imported Mustang base model V6?
One significant difference here is that we only have Lexus to represent the high quality Japanese brands and their sales barely make a dent in MW/Mercedes/Audi territory. It's all above brand here and people will pay silly money for it.
After the US and Germany, the UK is BMW's third largest market by sales volume I believe. I don't know if you have ever visited the UK or been here recently but my UK based forum users will confirm that there are simply thousands of BMW's here. You actually see more BMW 3 and 5 series on regular motorway journeys than you do mass market mid range models from Ford or GM nowadays.
We are one of BMW's most profitable world markets. The price differential between the UK and the US is not due to a lack of competition from other manufacturers I can assure you. Premium brands just charge a ridiculous amount of money for their products because they get away with it because in general we are not as astute buyers as our US friends. You would not believe how expensive some US models such as Mustangs are here compared to the US. How does $49,000 US grab you for a specially imported Mustang base model V6?
One significant difference here is that we only have Lexus to represent the high quality Japanese brands and their sales barely make a dent in MW/Mercedes/Audi territory. It's all above brand here and people will pay silly money for it.
[snapback]115337[/snapback]
I have not yet had the opportunity to visit the UK, but I hear what you are saying. Have a very good friend that lived there for a few years and from what he tells me and from what I know the cost of living there is really outrageous, not just for automobiles but for just about everything not to mention fuel prices, so I guess that things are relative.
I don't follow auto sales volumes very carefully but I would think U.S. sales dwarf those in the UK, could be wrong. Price of high end cars here in Canada have also become outrageous. Even once you commit to a lease or purchase we still have to contend with sales tax of 15.5% on top of everything.
I still believe that with only one high end Japanese vendor in the UK, the lack of choice in high end Japanese alternatives has to contribute to unusally excessive prices of German cars in the UK. There is also lot's of oil money being spent in the UK and if BMW is able to get these type of prices then there has to be a big demand .
One thing that I do know is that our American friends do alot of cross shopping
and if prices are low in the USA it is because the consumers there, make it this way.
04-14-2005, 10:24 AM
#27
Contributors
Join Date: Oct 2004
Location: Los Angeles. CA
Posts: 2,008
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: 2004 545i 6 spd Sports Package | NAV | PDC | Logic 7 | BT retrofit | SW V13.3
Originally Posted by ISUK' date='Apr 14 2005, 08:09 AM
[quote name='Hormazd' date='Apr 14 2005, 09:38 AM']I for one do not really have a problem with the cost of the options.? ...................I do not work for BMW and have no intention of blindly defending them,? but they are running a business and not a charity.? Economics 101.?? They charge what the market will pay or build enough to satisfy demand at a given price.
[snapback]115336[/snapback]
Hormazd,
I agree with your sentiment but you might take a different view if you were living on the UK side of the Atlantic. The 320d in my sig cost $65,000 US of which $19,000 was leather, pronav, metallic paint, sports seats, 17" alloys, bluetooth, alumium trim and a couple of other extras. Still think there is no reason to be annoyed at the cost of options and the lack of standard fit equipment? I actually have a little chuckle to myself when I see some posters from the US complain about the cost of BMW's there. There are other countries in Europe that are even worse off than the UK but that is due to high local taxation which can account for over 50% of the cost of a car. In the UK however, the high prices are down to larger profit margins for the manufacturers.
[snapback]115347[/snapback]
[/quote]ISUK, I understand and sympathiize with your situation. I would not be driving the car I drive if I was living in England. I was merely commenting on the fact that it is not just BMW but all businesses that will charge what their customers can palette. There are many posters here who moan and groan about BMWNA and how inflexible they are with options (No individual, limited colors, NO M Package etc) Not I. They have studied the market and for the most part have nailed it. We on this forum are just a handful of enthusiasts that care about what we drive. I see many many E60 owners who just drive the car. Its just "the middle sized BMW" to them. If you refer to their car as an E60 you will get a blank stare.
So expensive options or lack thereof are not really an issue for the masses.
Thread
Thread Starter
Forum
Replies
Last Post
Awest91
E60 Discussion
20
09-17-2022 11:05 PM
TroyE60
Private Member Classifieds
9
05-30-2019 05:01 PM