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      12-01-2022, 07:56 AM   #66
tgrundke
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Drives: '23 M340xi; '16 GTI Autobahn
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Spot on analysis.

The increase in rates and in prices will pinch the aspirational buyers the most. Unless other potential BMW owners go on a buyers strike, then BMW retains pricing power. If buyers balk, then first you get dealership discounts, then you'll start seeing OEM rate buy-downs, lease support, incentives, etc.

We're a long way off from that considering there are still backorders for most new cars.

Quote:
Originally Posted by F8SEVEN View Post
I'd say the price increase is definitely curious. As some have said, BMW clearly doesn't do this without considerable analysis. And yet, the economy seems to be trending in the cool down direction. Hard to know really.

I work in financial services, so I am somewhat immersed in "expert" exposure. I'd say there are three types of experts. First are the traditional Doctoral-level economists. They study the past and try to apply everything they've learned to the present. Second are the long-tenured industry experts...the ones who have seen it all, except for the next thing. They generally shrug their shoulders and move on. Finally, there are the experts who made one big call once and got famous on it. They rarely make the same prescient call a second time. What do they all have in common? They almost never see the next thing coming. Example: FTX.

I'm in the camp that there will be discounts soon. I don't think that has to involve a terrible recession or crash, though it could. Mostly, it's just that price increases coupled with interest rates will reach a crescendo or critical mass. At that point they'll have to come down. It's the natural course of things.
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