Sales of Bavarian Motor Works' namesake brand in the United States plunged 15.2% to a 16-year low in 2008, as the credit crunch and the U.S. recession scared away even buyers for one the world's highest-quality makes, The Associated Press reported Friday.
U.S. sales declined to 249,113 vehicles, The AP reported. Global 2008 sales slumped 5.8% to 1,202,239 vehicles. BMW's shares rose 49 euro cents to 22.39 euros Friday on the Frankfurt exchange.
Economist Richard Felson said BMW's sales decline "is indicative of a pervasive economic slowdown and a loss in confidence, across society and on both sides of the Atlantic."
"Even with the impact of car leases, BMW still draws from a distinctly high-end consumer. Many new car BMW buyers are people who have the means to pay in cash, these are the check writers, if you will, and the fact that they're pulling back as well speaks to the recession in the U.S. and Europe," Felson said. "It shows a lack of confidence by these car buyers, who often are executives and other decision makers, and we only see that during serious recessions.
By extension then, Felson said one cue to investors that confidence is rising in decision maker circles would be an improvement in quarterly BMW sales in the U.S. -- in this case a smaller, year-over-year decline in Q1 sales. Additional year-over-year quarterly declines would indicate continued pessimism among decision makers, he added.
Auto Sector / Economic Analysis: The BMW U.S. sales stat speaks for itself. When cash buyers are pulling back the reins, that's a conservative stance on the part of high-end consumers -- something you only see in pronounced recessions.
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