There are several reasons why many of these dealers are going under. Sales are not meeting expectations set by dealer development back 5 years ago. Back when Tom Pluckinsky was running the show, and dealer development was showing a presentation that demonstrated year over year growth of 25-30%, many prospective dealer principals bought into the dream of 30,000 units per year by 2006 (in North America). Several dealer principals left that meeting and drew up plans for these Exclusive BMW Dealer Palaces rather than taking a more conservative approach.
It is obvious that BMW has come nowhere near that 30,000 annual unit number. As a result, you are seeing many of the BMW Showcase dealers kicking the bucket, and other dealers unwilling to commit to 100 units per year requirement and dropping BMW from their lineup. Couple that with BMW NA's new chief, Artero Piniero, and his cost cutting strategy that undermines the existing dealer base, and it's no wonder we see dealers leaving the marquee on a daily basis. At the same time, it's a two way street. BMW, in their effort to create a BMW lifestyle branding, as well as overstating the potential of the North American BMW market, created a situation where some dealer principals got in over their head. At the same time, there are some dealer principals that ALLOWED themselves to get in over their heads by over committing floorplan, apparel, or focused way to much on new bike sales rather than the recurring revenue brought in by Q-U-A-L-I-T-Y S-E-R-V-I-C-E. I personally know two dealers in very serious financial straights, but both dealer's problems can be traced to mistakes they made buying into the whole BMW growth thing without doing the proper financial analysis. In both cases, the adage "more money than brains" is quite appropriate.
Become a Supporting Member of K-Bikes.com
'06 K1200GT Crystal Grey
'04 Sprint RS Caspian Blue
"I can make a woman orgasm so hard she screams out random numbers. Those numbers end up being winning lottery numbers."