 | Home > Off Topic > BMW to pay $18 million U.S. fine over inflated sales |
 
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018   
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Almost an unbelievable story
And the quote attributed to BMW regarding "intentional misconduct"  ~ seriously!
"WASHINGTON -- BMW and two U.S. subsidiaries agreed Thursday to pay an $18 million fine to resolve accusations that they disclosed misleading information about the German luxury automaker's retail sales volume in the United States while raising approximately $18 billion from investors in corporate bond offerings. The U.S. Securities and Exchange Commission said from 2015 to 2019, BMW inflated reported U.S. retail sales, which helped BMW close the gap between actual retail sales volume and internal targets and "publicly maintain a leading retail sales position relative to other premium automotive companies." It added BMW of North America "maintained a reserve of unreported retail vehicle sales — referred to internally as the 'bank' — that it used to meet internal monthly sales targets without regard to when the underlying sales occurred." The SEC probe started in late 2019, BMW said. "There is no allegation or finding in the Order that any BMW entity engaged in intentional misconduct," BMW said in a statement, adding it "attaches great importance to the correctness of its sales figures and will continue to focus on thorough and consistent sales reporting." The SEC said BMW "paid dealers to inaccurately designate vehicles as demonstrators or loaners so that BMW would count them as having been sold to customers when they had not been." "BMW misled investors about its U.S. retail sales performance and customer demand for BMW vehicles in the U.S. market while raising capital in the U.S.," said Stephanie Avakian, the SEC director of the division of enforcement. In September 2019, Fiat Chrysler Automobiles and its U.S. unit agreed to pay $40 million for misleading investors about its monthly sales figures to resolve a separate SEC probe." Story may sit behind a pay wall. https://europe.autonews.com/automakers/bmw...ated-sales " First, from January 2015 through March 2017, BMW NA used its demonstrator and service loaner programs to boost reported retail sales volume and meet internal targets, resulting in demonstrator and loaner vehicles accounting for over one quarter of BMW NA’s reported retail sales in this period." " In certain months during this period, demonstrators and loaners accounted for approximately 40% or more of BMW NA’s reported retail sales. These purported demonstrator and loaner vehicles were not actually sold to customers at the time that they were reported as retail sales by BMW NA." " In most months during this period, BMW NA management authorized a set of incentives at the end of the month to “close the gap” between actual retail sales and BMW NA’s internal monthly target, which had been agreed upon by BMW NA and BMW AG as part of the annual planning process. By the end of the month, when it became apparent that BMW dealers would not be able to sell sufficient vehicles to retail customers to achieve BMW NA’s internal retail sales targets, BMW NA offered dealers financial incentives, often contacting dealers multiple times or after business hours at the very end of the month, to encourage dealers to designate vehicles as demonstrators and loanersin order to help BMW NA achieve its monthly internal retail sales targets. BMW paid dealers financial incentives,typically between $1,000 and $3,000, for each vehicle designated as a demonstrator or loaner as part of the month-end programs." (https://www.sec.gov/news/press-release/2020-223) |
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25th Sep 2020 12:44pm |
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| markb110 Member Since: 22 May 2010 Location: Guildford Posts: 2522  
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Never trust a salesman, as they are always a lying bunch of s***s....
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25th Sep 2020 5:25pm |
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| 90 Dreamer Member Since: 13 Jul 2019 Location: Oop North Posts: 2054 
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Think you missed the main word.......
AGAIN................  |
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25th Sep 2020 8:15pm |
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| CallumB Member Since: 22 Sep 2018 Location: Norfolk Posts: 77 
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I shouldn't joke about it. Our experience of getting our VW Caddy re-mapped on recall was  . On the bright side, we finally got rid of it when the injectors started giving up at 10k miles at £450 a pop...... |
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25th Sep 2020 8:46pm |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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Actually, it is the salesmen in the US, or the independent dealers to be more precise. If they did not report the sales incorrectly then the situation may not have arisen. They were paid to provide the inaccurate data, and knew what was being done and why: "Dealers communicated to BMW NA their concerns regarding the use of month-end incentives for demonstrators and loaners, describing the programs as “late-inning monthly close shenanigans” and “panic punch programs” and expressing concern about “false reporting.” Dealers also informed BMW NA that it had set “unrealistic volume goals” that could not be “achieved through retail sales to BMW buyers.” That's not not to say that the corporate elements of BMW, both in Germany and the US were not also involved. The report makes clear all knew what was being done. Their own internal audit teams were challenging the behaviour but being ignored; and it's BMW that carries the can (and the $18 million penalty) for doing so. |
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26th Sep 2020 6:23am |
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| CallumB Member Since: 22 Sep 2018 Location: Norfolk Posts: 77
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Sorry but no. You're missing the point - the symptom is the US sales - the cause is the corporate desire to report inflated figures to increase share and their willingness to pay dealers to achieve it. As a 30 year veteran of the corporate sale environment, I'm fully aware of what goes on and I've seen top execs of very large corporations go to jail over mis-reporting. An $18m fine is barely a slapped wrist.
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26th Sep 2020 4:15pm |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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I might be missing your point, but the inconvenient truth of this story is laid out in the SEC report, quote where that says the dealers were blameless and then you might be right; otherwise saying it's not the salesmen this time is just factually incorrect. They provided the "sales figures" in return for cash incentives.
Where others involved ~ clearly yes. Where they more culpable? Maybe also yes. But the report makes clear it was US dealers and two US elements of BMW that were the key participants; albeit BMW Germany was made aware of the situation and appeared not to act on it until SEC involvement. |
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26th Sep 2020 6:49pm |
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| Projectblue Member Since: 22 Nov 2011 Location: Devon Posts: 1096
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I was a car salesman for all of 6 months back in the late 80's early 90's. I hated it because you had to be ruthless and that's just not me. However, it was for a major car manufacturer that is American owned. And I guarantee you that everything in that list that's been alleged at BMW is done by that famous brand and every other volume car builder
Fast Forward to 5 years ago and I couldn't get a Mercedes demonstrator on fleet for longer than a fortnight because they had been sued for Millions$ for the same stunt that BMW have been had for. Standard. Practice. New project and it's green: www.projectoverland.info |
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28th Sep 2020 11:46pm |
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| Projectblue Member Since: 22 Nov 2011 Location: Devon Posts: 1096
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From my knowledge (and it is out of date) it's not the salesperson. They are too low in the food chain. It's Sales Manager/Director and Dealer Principle that sign off that stuff from my experience. New project and it's green: www.projectoverland.info |
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28th Sep 2020 11:48pm |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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Quite, hence why I said "... the salesmen in the US, or the independent dealers to be more precise."
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29th Sep 2020 6:10am |
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