Quote:
Originally Posted by rjroch
For a 3 year, roughly 50%. They're lower because a few years ago this was a brand new car, and BMW didn't know what it would be worth in the used market. Residuals were in the low 60s at that time. To say they were optimistic would be putting it mildly.
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You're being either a little naive or a little generous towards BMW - they knew damn well a 228 was not going to be worth 60% of its value in 3 years. It's a long complicated dynamic to explain fully, but sometimes it makes sense to stuff the channel, hit your numbers today and worry about tomorrow tomorrow, etc.
Imagine having a gun to your head with your annual bonus based on a sales target, you (or anyone in sales) has a tremendous incentive to do things that aren't necessarily in the best interest of shareholders but are in the best interest of your annual bonus.