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Racing Teatray

Cor...look at that depreciation...

I don't want it but this strikes me as a lot of comfortable, well-equipped, well-maintained, low-mileage and decently modern 3.0 basking shark for just £3k:

http://www.autotrader.co.uk/searc...e-to/3500/fuel-type/petrol/page/2

Assuming it cost some poor blighter the thick end of £30k in 2007, that's pretty epic depreciation.

Similar one here and perhaps black hides the styling better:

http://www.autotrader.co.uk/class...00_miles/keywords/xenon?logcode=p
gonnabuildabuggy

That's how to buy cars. wide search, private sellers.

I quite fancy the Mondeo for that cash as well.

Although that's bad depreciation a friend of a friend just bought an ex-demo 640d GC with 3K on it for £41K.

List is £72K  
Alf McQueef

They probably lost another grand on sunday night!

I'm always drawn to this sort of thing. Not a class leader, but decent - and how much is the price gulf to the class leader now?
Clunes

The 640d GC comes with epic discounts new though (typical figures I've heard/seen are in the 20k region without much trying) which puts that at £52k to a first buyer so £41k is not quite such a huge drop from what would be the purchase price - damn nice car for the money though - I've often found myself looking at second hand models - the interior looks fantastic and overall appeal is high.
Martin

I got offered an unregistered but in stock 640d GC with a couple of options for £50k and had a choice of 3 colours.  Lovely car, but just too small inside for a couple of growing boys (the 3 series is more suitable).
gooner

Martin wrote:
I got offered an unregistered but in stock 640d GC with a couple of options for £50k and had a choice of 3 colours. †Lovely car, but just too small inside for a couple of growing boys (the 3 series is more suitable).


So who makes a profit from selling it at that price? Surely BMW didn't give it to the dealer that cheap? Are the dealers forced to order a few 6 series in but then find they can't sell them? Seems utter madness to me and does make it difficult for the German big three to keep insisting there's a market for these niche models.
PG

gooner wrote:
So who makes a profit from selling it at that price? Surely BMW didn't give it to the dealer that cheap? Are the dealers forced to order a few 6 series in but then find they can't sell them? Seems utter madness to me and does make it difficult for the German big three to keep insisting there's a market for these niche models.


That's an interesting question.

But the dealer would have to sell an awful lot of others cars to cover a loss so high on the 6 GC. So as there are way, way bigger profit margins in bigger cars, as the component cost of a 6 series / 6 GC is not orders of magnitude higher than a boggo 3 series, they must be getting at least some manufacturer support to order / register them in the first place.
Chip Butty

I don't think BMW will be retailing at a loss, they just won't be making as much as they had originally planned.

The material content of a 6 series GC is much the same as that of a low spec 5 series - all that extra leather and feature is worth a couple of thousand at the most.

Question is - is the lower profit returned on each unit enough to cover the development and investment costs unique to that model ?, or to cover that central cost allocations of shared overhead to that model line ?.

BMW's product portfolio is such that they can and will be very tactical in the offers they create in order to keep sales up and maintain a healthy profits position at a group level.

It's also worth considering that " niche " models are now extensions of the global platform finance equation. So much is shared between the models, that the investment for elements that are different (body panels, interior parts, etc) is more than recouped in economies of scale gained on the common parts and the additional revenues from the incremental units sold.
Tim

The dealer bonuses on some cars are quite eye-opening.
I know that last summer Mitsubishi were offering over £5k on L200s and on some occasions adding another £2k to that for some incentive packages - this on cars that would normally cost the dealer £20k.

In late 2013 Subaru were offering £15k packages if the dealers took one new car and one ex-management car.

These offers were in addition to the normal volume bonuses that the dealers were working to and I'm sure vehicles taken under these packages counted towards the volume bonus.
gooner

Chip Butty wrote:
I don't think BMW will be retailing at a loss, they just won't be making as much as they had originally planned.

The material content of a 6 series GC is much the same as that of a low spec 5 series - all that extra leather and feature is worth a couple of thousand at the most.

Question is - is the lower profit returned on each unit enough to cover the development and investment costs unique to that model ?, or to cover that central cost allocations of shared overhead to that model line ?.

BMW's product portfolio is such that they can and will be very tactical in the offers they create in order to keep sales up and maintain a healthy profits position at a group level.

It's also worth considering that " niche " models are now extensions of the global platform finance equation. So much is shared between the models, that the investment for elements that are different (body panels, interior parts, etc) is more than recouped in economies of scale gained on the common parts and the additional revenues from the incremental units sold.


This perhaps raises another interesting point that perhaps customers are being ripped off by BMW et al who take a 30k 5 series (which already generates a profit), adds different body panels and uses better materials plus updated engines and some suspension components (I imagine most of an M6 suspension is shared with that of a 520d) and then charges up to £70k extra. Going purely on list price, presuming anyone actually pays it, though I imagine someone must, is the cost justifiable? Or is the hefty discount a reflection of BMW setting unrealistic and unobtainable list prices for their high end vehicles? Is it just a ploy to make the depreciation of such cars seem more palatable? After all if your £100k car is only worth £50k in 3 years time, that's quite eye watering, unless of course you only paid £65k for it, in which case it looks a lot less painful.
Frank Bullitt

Profit lines on the 520d will be based on quantity of sales where as the higher spec/ engine models will be sold in much smaller quantities - there's no way a bigger engine and some fancy leather adds £30k.

That 407 V6 looks astounding value, especially as the red Nappa leather is streets ahead of the rhino hide BMW offer in their £30k 520d.

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