Ingress Auto 1st Anniversary Used Car Fair

Sorry, there was a IT problem when I clicked post thread. This fair is being held at Ingress @ Mutiara Dsara from 13th to 15th March in conjunction with their 1st anniversary. Their sms to me says value buys and attractive financing packages. The GM told me that club members are always more than welcomed to attend.

 

It is not so easy on giving having discounts for services especially as the prices are regulated by BMW Msia. Otherwise, it will be a free for all and dealers undercutting one another. A used car fair is what a used car fair is supposed to be. I supposed some interesting financing package will be thrown in

 

wah attractive finance deals, great.... so can trade-in older bmw ah, at attractive prices?

 

I was there just yesterday with one of our members looking to buy the new LCI 325i M sport - white with saddle brown interior. All I can say is that dealing directly with the GM as a friend is a different experience when you wanna buy the car, as compared to some sales person there. Previously many of us have been buying from AB through our sales person, but with Ingress and the relationship the GM has with some of our committees and members, I forsee more club members switching from their regular AB sales persons to buy through the GM and his team

Prices are controlled by BMW for service hours, parts, and sticker price so there is nothing much the dealer can do. But for pre-reg, demo cars and used cars there is more flexibility which the dealer can offer as its "technically" a used car in BMW Malaysia's eyes. Its about margin then and of course we can try to work something out with them if we have the numbers to get new car buyers some attractive discounts from Ingress. I've read in overseas market, official BMW club chapter members get discounts from BMW (5%?) which the dealer probably claims back from BMW as rebates/incentives.

 

Hear! Hear!! I totally agree with all that has been said by E46F here. Prices are regulated and most of us understand that but great service is priceless. The latter is good enough for me to switch my next purchase to Ingress even though they're the newest kid on the block. Just hope they keep up the great job of treating their customers special. I feel so at home at that place, they even know how I like my coffee, no kidding..!

E46F - I was there yesterday too, how come you never call me ah...?!

 

Aiks,didn't realize you were free and it was adhoc. Next fella to target to go help him spend some $$ is DY. hehe.

 

bro, not all businesses operate in the same way as they say..."different strokes, for different folks". it all depends on the product and the market environment.

comparing the airline biz and the communication biz and bringing into discussion the car service biz are all totally different business marketing plans where i'm sure they have made all the study needed before going for the exclusive dealerships.

certain things will remain...its not gonna be cheap servicing your car at these exclusive places..which is why they are...uh...exclusive. the same goes for other car makes. the dealers are all guided by the prices they have agreed so why spoil the market by starting a price war where no one will find it viable to run the biz at the end of the day.

consumers have other options too to repair their cars at other places like Mpower (heheh!) and Bimmerholics (i like this name, catchy!)

Just for the sake of discussion, Genting Highlands is doing so well during the school holidays or any holiday for that matter. Do they need to discount their hotel rates to attract customers...hell..no!

AirAsia is not doing very well. They have purchased new aircraft which is more than the capacity they have. They secured buying options hoping to sell these options to MAS later on and making money in between. MAS told them to fly kites and went for Boeing's instead leaving AirAsia stuck with the options. MAS went into the price not because of the consumer but it was because they have a bone to pick with AirAsia. If possible, MAS wants to obliterate AirAsia from the surface of this earth....just for fun!!

 

After finding out more about what dealers have to go through, I realize its tough to hold the BMW dealership.

1) They have to spend tons of $$$ to setup the 4S service centers in compliance with BMW Coporate Image. Even the glass at the bottom of the car on display has to be flown in from Germany and cannot be locally sourced which cost something like RM60k.
2) They have quotas to stock parts and accessories which they have to buy from BMW. So even stuff like BMW Performance parts, they have to sell, and if they can't sell, then they have to be creative and "bundle" in with cars which they want to move fast. As a result they have to get hit on margins
3) BMW requires the dealers to be able to service all types of their cars. For example BMW armored 7 series cars weigh significantly more and even the jacks in the workshop is required to be swapped out to lift these heavy armored cars. How many armored 7's are there in Malaysia? Less than 10 and they have to buy these special jacks and get specially trained and certified technicians to work on these cars. Each car lift jack also cost something like RM60-70k a pop. How much can you make for each service? Do the math to see if this will be a profitable investment.
4) The holding cost of cars is not cheap. To have an M5 in the showroom for 1 month cost the dealer something like RM9k of financing interest. Do the math and see how fast you can loose money if the cars do not move.
5) Margins on new cars is small (can't remember but its not a lot) for dealers. On average on a good month they may move about 30 cars. Revenue may look good, but profits taking in account the low margins and the high operational and capital expense its a very scary business.
6) They can't make a lot as well on service labor cost which can cover all operational and capital expense costs. I.e. say they service 20-30 cars a day, minus cost of parts, whats the profits from service and is that enough to sustain a business like that.

I'm not saying competition is no good. I am for it. But for dealers to survive, cultivating a price war among your resellers and dealers is probably not a good idea. If you look at traditional channel management, its one thing which the principal try to manage is preferential treatment on prices (without basis). Principals must make sure their resellers and dealers can own and run a sustainable business, and a price war is not the way to go about it. In fact taking in account the luxury marque and the image and brand BMW hold, a dealer price war will hurt their image and service in the long term. BMW Malaysia should focus on competing effectively with the Audis and Mercs and not creating price war competition amongst their dealers IMHO.