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BMW: worst crisis in history


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http://www.autocar.co.uk/News/NewsArticle.aspx?AR=236253

From Autocar(UK):

Car makers that had seemed in a strong position to weather the global economic storm have publicly admitted a 'crisis' as sales continue to slow down.

BMW's boss Norbert Reithofer yesterday described the situation to Germany's Spiegel magazine as "the worst crisis BMW has faced in its history".

Despite the slow sales, it is the German giant's reliance on leasing that has put it in a very vulnerable position.

Meanwhile Daimler boss Deiter Zetsche assessed the current conditions as "the worst crisis since World War II".

Martin Winterkorn, boss of Volkswagen, told reporters: "We have never before seen this kind of crisis" adding that "difficult cuts" maybe unavoidable.

But it's not just the German's who are talking openly about serious problems.

Previously stable Japanese giant manufacturers like Honda and Toyota are also publicly airing grave concerns.

Toyota's vice president Mitsuo Kino$h!a described the situations as "an emergency of a magnitude we have never seen before".

Honda has also admitted that it will be "very difficult" to meets its full-year profit forecast and is scaling back production by some 40,000 units in Japan.

Industry experts say the most flexible car makers, which can adjust quickly to falling demand, will be best placed in the months to come

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So really, globally, what has changed? Are people stricken in such a manner that they no longer want to engage in gainful labors? Did the need for shelter and sustenance suddenly evaporate?

What has become so off-kilter that demand for every consumer item has fallen into the abyss? Why are so many fearful of the economy falling into a Depression, a concept that only those over the age of 70 and up may be acquainted with?

So many questions and a dearth of answers.

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So really, globally, what has changed? Are people stricken in such a manner that they no longer want to engage in gainful labors? Did the need for shelter and sustenance suddenly evaporate?

What has become so off-kilter that demand for every consumer item has fallen into the abyss? Why are so many fearful of the economy falling into a Depression, a concept that only those over the age of 70 and up may be acquainted with?

So many questions and a dearth of answers.

All good questions.

Is it the drying up of credit? When even Toyota is getting worried, something is amiss.

Locally, you wouldn't know anything had changed. Still seems to be many new vehicles on the street, most in the premium category.

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All good questions.

Is it the drying up of credit? When even Toyota is getting worried, something is amiss.

Locally, you wouldn't know anything had changed. Still seems to be many new vehicles on the street, most in the premium category.

I think it's mass coercion via fear. There was an urgency present in the upward spiral of energy costs which peaked in mid-July that didn't square with the ongoing collapse in the Real Estate Markets.

We're re-setting the value of everything tangible and intangible and it isn't pleasant to weather a contraction especially one having the heft and scope of this one.

It's got much to do with a levelling of the global playing field. Heaven help us if Chinese peasants, existing on the equivalent of $1 US funds per day, ever demand wage parity. Their government would likely squash any uprising but the kettle is near the boiling-point. In India as well, largest Democracy on the planet.

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Very well said. You obviously keep informed. You are quite right: 'mass coercion via fear'.

Here in Canada, for some reason we've not been as affected as much as other countries. One reason, it is thought, that our banking system tends to be quite conservative, and regulations are such that financial institutions are in pretty good shape. Car sales in Canada have stayed quite stable and even some increases.

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Canadian society has always seemed more grounded in the practical and the real to me. Contrasted with The United States of America where we're all given to believe that we are so mighty and special. The last remaining 'StuporPower'. Indeed we're all that and a bag of trans-fat laden chips.

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>>"Despite the slow sales, it is the German giant's reliance on leasing that has put it in a very vulnerable position."<<

Undoubtedly it is also the reliance on fleet sales that has them in their pickle.

The BMW commercial which may still be running in some markets and had been running for the past three months bluntly stated that their vehicles were the subject of automotive lore. Legend no less. So even legends can be vulnerable and subject to dilution through the over-selling of a dream.

Cars may just be relegated to being transportation for a while. The aspirational lust applied to what is basically an appliance is non-sensical. We may actually learn that lesson too. I hope everyone has at least one good memory of their favorite automobile as it may have to suffice for a while.

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BMW has been able to stay independent throught the good times. Now the hard times are here it may force them to take a dance partner to make it. With the cost of development of cars and with less money coming in new products will be slower in coming to market.

Other than the Mini BMW has little to support them in a maket where many will cust their spending.

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I still believe in car lust and don't see them as mere appliances.

I don't want to be reduced to driving drab, socialist, state designed transportation devices.

Beautiful objects will always have a market.

I'm age 52 and have gone up the ladder as it were with vehicles through the years. I was projecting my own views as it pertains to the concept of the vehicle-as-appliance.

I had one brief moment recently where I'd actually conceived of no longer driving, then the moment passed as I realized the degree of self-reliance I derived from hauling my own self around. But I know that I'm not the gad-about on wheels as I once was. My girlfriend/fiance handles about 30% of the driving on our joint trips afield in her CTS (very nice vehicle btw). I'm becoming more of a homebody as retirement draws closer. So, there's no call from me to assert an Al Gore-like Puritanism across the board on the public-at-large. I believe strongly that folks should be able to drive what they want.

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Hey, there's another side to my car lust....at times, my pragmatic side emerges and want a simple vehicle like the early VW Beetle. The earlier Jeeps. Pure and elemental. Maybe the Smart car is the new Beetle? I'm more on guard with the Toyota Priuses of the world...just does nothing for me. I gag just a bit.

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The Beetle and Jeep weren't stellar designs either.

But they had that 'thing'.

And I believe the Smart does have a future.

It's sales worldwide are beyond projections.

Here in Canada they have sold exceptionally well.

And Toyota is poised to introduce a similar vehicle soon.

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Hey, there's another side to my car lust....at times, my pragmatic side emerges and want a simple vehicle like the early VW Beetle. The earlier Jeeps. Pure and elemental. Maybe the Smart car is the new Beetle? I'm more on guard with the Toyota Priuses of the world...just does nothing for me. I gag just a bit.

Mine did run the gamut as well. I can admire a nice looking ride most of the time. Even once I'd seen a beaten up '93 Z-71 GMC Sierra Extended Cab/Short-bed that still looked fit, fine and solid as though machined from billet-stock. Opinions vary with the day and the weather.

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The Beetle and Jeep weren't stellar designs either.

But they had that 'thing'.

And I believe the Smart does have a future.

It's sales worldwide are beyond projections.

Here in Canada they have sold exceptionally well.

And Toyota is poised to introduce a similar vehicle soon.

It is bombing here in the US, and there are many other tiny cars that are far superior waiting in the wings.

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Fair enough, haven't heard what's happening with it there.

The city I live in is jam-packed with premium, hi-end cars and suvs....and many Smart cars, very popular here...and this in the oil capital of Canada.

They seem to appeal to all genders and ages and income levels, much like the Beetle did. The Mini is like that too.

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So really, globally, what has changed? Are people stricken in such a manner that they no longer want to engage in gainful labors? Did the need for shelter and sustenance suddenly evaporate?

What has become so off-kilter that demand for every consumer item has fallen into the abyss? Why are so many fearful of the economy falling into a Depression, a concept that only those over the age of 70 and up may be acquainted with?

So many questions and a dearth of answers.

It is the collapse in credit, as credit fuels the economy.

The only reason we're not in a 1930's type of Depression is because public authorities were much quicker to move with regard to liquidity and because real interest rates adjusted much more quickly than during the Great Depression. Until the real estate market balances itself and people with negative home equity get out of trouble it will be hard to see any major consumption-based economic expansion.

Even in China there may be trouble: they were very aggresive in moving with a big fiscal package and interest rate cuts...

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Very well said. You obviously keep informed. You are quite right: 'mass coercion via fear'.

Here in Canada, for some reason we've not been as affected as much as other countries. One reason, it is thought, that our banking system tends to be quite conservative, and regulations are such that financial institutions are in pretty good shape. Car sales in Canada have stayed quite stable and even some increases.

That is going to change very rapidly. November's numbers will be ugly in Canada. Don't forget, our economy usually follows at least one quarter behind the States. Our recession is just starting. Manufacturing companies are closing up shop left and right, here in Ontario. Real estate prices are sure to follow. Our banking system is only safe for investments made in Canada, but CIBC and others have made poor investments south of the border, which they are only now starting to pay for. Commodity prices are going to slam BC and Alberta before long. A whole heaping pile of Not Good.

We need look no further than the stalled leveraged buyout of BCE by the Teacher's unions and various banks. They were talking about a $52b leveraged buyout. That means they were borrowing much of the money. That is the disease that has paralyzed the financial markets in the past few months. All the major banks are finally having to admit that many of their loans were totally BS and most of the collateral is gone - if there ever was any collateral.

Also, without GM and Chrysler to kick around in the leasing department, leases have skyrocketed up here. Hell, I can sell someone a loaded Cobalt for the same payment as a 48 month lease on a crappy Versa. And a lot of leasing companies are still smarting from the dollar being at par for a year. The falling buybacks on BMWs, Lexus, etc. is very ugly. This is all shaping up to be a perfect storm that will hit the high end marques in the beginning of '09.

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Bu...But... I thought it was only Detroit that "Put themselves in this situation."

Speaking of a tighter tie up between GM and BMW, why not sell Pontiac to BMW as an entry level division? :smilewide:

Mini is BMW's entry level brand...

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Mini is BMW's entry level brand...

Mini is more of a niche... I'm talking a volume building entry level brand.

Besides, this philosophy could also save them from whoring out the Mini name like they apparently are planning to do. Most Mini owners I know are repulsed by the Clubman and forthcoming SUV.

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Mini is more of a niche... I'm talking a volume building entry level brand.

Besides, this philosophy could also save them from whoring out the Mini name like they apparently are planning to do. Most Mini owners I know are repulsed by the Clubman and forthcoming SUV.

Mini already has volume--over 200k worldwide in '07. Pontiac is niche--NA only.

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It is bombing here in the US, and there are many other tiny cars that are far superior waiting in the wings.

The Smart? Bombing? I have to disagree. There is a 1-2 year waiting list, unless you want to pay $5K over MSRP for one on eBay.

Of all small cars, the Smart is on my short list. It's 2 door. Its RWD. It is actually small enough to park anywhere, like a small car should be.

I fit in the Smart. I can't say the same for the Aveo or Yaris. And both are way too big due to the useless second set of doors and useless backseat. (The backseat is useless when I have the front seat ALL the way back).

I only want one because parking a '95 Caprice in Manhattan gets old real fast. And some NYC parking places only charge half price for the Smart to park. This is $250 a month instead of $500.

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I've often thought that tighter relations between GM and BMW would be an interesting tieup.

Hahaha... yup. I said the exact same thing when MB and Mopar tied the knot.

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Mini already has volume--over 200k worldwide in '07. Pontiac is niche--NA only.

Again, I'm not talking about present tense. I'm talking "what if".

Mini moves a lot of volume, but it's appeal is a niche and BMW must walk a fine line in order not to damage the image of the division (Which some, especially owners, believe that they are already doing)

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The Smart? Bombing? I have to disagree. There is a 1-2 year waiting list, unless you want to pay $5K over MSRP for one on eBay.

Of all small cars, the Smart is on my short list. It's 2 door. Its RWD. It is actually small enough to park anywhere, like a small car should be.

I fit in the Smart. I can't say the same for the Aveo or Yaris. And both are way too big due to the useless second set of doors and useless backseat. (The backseat is useless when I have the front seat ALL the way back).

I only want one because parking a '95 Caprice in Manhattan gets old real fast. And some NYC parking places only charge half price for the Smart to park. This is $250 a month instead of $500.

How BIG are you???? I am 6'2" and have no troubles driving an Aveo, nor sitting in the back seat. Although the Smart is roomy, it is only a 2 seater - and not cheap, either. If your dead set on sending your money overseas, get a Mini or a Miata, er, M5.

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How BIG are you???? I am 6'2" and have no troubles driving an Aveo, nor sitting in the back seat. Although the Smart is roomy, it is only a 2 seater - and not cheap, either. If your dead set on sending your money overseas, get a Mini or a Miata, er, M5.

Hmm..all those cars cost alot more than the Smart. The Smart is a cheap, tiny city car. Very specific purpose.

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How BIG are you???? I am 6'2" and have no troubles driving an Aveo, nor sitting in the back seat. Although the Smart is roomy, it is only a 2 seater - and not cheap, either. If your dead set on sending your money overseas, get a Mini or a Miata, er, M5.

6'4" and 375... I am bigger than most NFL defensive lineman... but I'm long in the torso and wide at the shoulder, so to avoid having to cut a hole in the roof, I have to tilt the seat _way_ back. When I drive most small cars, my side view is out the rear door window. I "fit" in a Corolla... but its uncomfortable as hell.

Realistically looking at my driving habits, I drive solo 95% of the time. I have a single passenger the next 4.5% of the time. On the rare times I would have a third, I can drive my Caprice or Bonneville. A 2 seater is fine for 99.5% of my driving. Though, granted I take up much of the Smart car's 510 pound capacity.

I'm in the market for a G8 GXP (or coupe) _AND_ a Smart car. I live a split life, half in the big city, half in rural Jersey.

I would have bought one of those "Chevy Triplets" had they built them... I want to buy American (yeah, I know the G8 comes from Aussieland... but that's because GM hasn't bothered to build them here).

I've driven the Mini... I'd have to modify the seat tracks a bit... but the Mini isn't as mini as the original... 142/3" versus 120". 20" is a big deal in NYC. The Smart is 106"!

The Miata... too long and I doubt I'd fit. I'd really buy a Solstice or Sky first... but I had a near panic attack when I nearly got stuck trying to get in the Soltsice coupe at NYIAS.

M5? Rather have the G8. I'm a GM diehard.

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Mini is more of a niche... I'm talking a volume building entry level brand.

Besides, this philosophy could also save them from whoring out the Mini name like they apparently are planning to do. Most Mini owners I know are repulsed by the Clubman and forthcoming SUV.

The SUV is a very, very bad idea.

Off topic, but this is why I think it is a bad idea to kill saturn. MINI and Scion are pretty much one hit wonders...Saturn has established itself as a decent brand with a sports car, creative compacts, crossovers, family cars, etc.

I'd like to see Saturn live, but methinks I'm in the minority here.

Chris :neenerneener:

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How BIG are you???? I am 6'2" and have no troubles driving an Aveo, nor sitting in the back seat. Although the Smart is roomy, it is only a 2 seater - and not cheap, either. If your dead set on sending your money overseas, get a Mini or a Miata, er, M5.

If one could fit into it. I think the Aveo would be a better car for NYC. A Miata top is easily slashed (unless you get a hardtop) and a MINI will draw attention to itself and invite theft and vandalism.

The Aveo is very easy to park, my mother has one. Double parking is a breeze.

The MINI and Miata are two of my fav. cars...but I love GM also.

Chris

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Wouldn't it be something if they brought back the Isetta?

It's been rumored for several months now that BMW is planning a revival of its famed Isetta nameplate, and it looks as though the German automaker will give the green light to the next-generation city car. The all-new Isetta will be a rear-motored electric car and should hit the U.S. market by 2012.

The Isetta project is intended to help BMW meet California's upcoming zero emissions vehicle (ZEV) legislation. The all-electric mini car will launch in the U.S. in 2012, but will likely be sold in other world markets after that date.

The new Isetta will also spawn a new range of city cars. The new range will be powered both diesel and gasoline powerplants, and future models could even be motivated by BMW motorcycle engines.

BMW has to decide which brand it will market the new car under and is still considering a partnership with another automaker. "It could be BMW, Mini or another name," BMW chief Norbert Reithofer told AutoCar. He continued by saying "co-operation [with another car maker] is possible," stating that BMW would decide on the matter by the end of 2008.

One likely candidate is Mercedes-Benz' Smart division.

It's also possible that BMW will base the new Isetta on a concept by Magna Steyr, the firm that currently produces the BMW X3.

article link

isetta-29-11-07.jpg

Edited by haypops
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