BMW and Mercedes-Benz notice that their cars are selling well, despite the increased prices and longer delivery times due to the chip shortage. So apparently there is more margin to grab on the cars. Manufacturers want to keep the higher prices and longer delivery times.
As a bit of luck, BMW and Mercedes-Benz have found that consumers are willing to pay big bucks for their cars and are willing to wait longer. At the bottom of the line, that is good for the cash of both car manufacturers. After all, the profit margin is higher. So that tastes like more. BMW and Mercedes-Benz will continue to reduce their production, so that they can charge more money for their cars. That’s what the companies say Financial Times. It is estimated that due to the chip shortage, cars have become 10 to 20 percent more expensive because less can be produced. Nevertheless, the consumer appears to be willing to pay that price, hence the decision to keep it.
“We will deliberately make the supply smaller than the demand and at the same time we will focus more on the more expensive luxury cars,” said a Daimler CEO. Financial Times. BMW says it will keep production “the same in order to maintain current prices”. The company noted “huge upward pressure on prices” in the past year.
It has also become clear that people are willing to wait longer and are also open to buying remotely. “In the past, people wanted to enter a showroom on Saturday at 10:00 am and be out again at 1:00 pm with a car,” says the BMW CEO. “But now we hear from our dealers that people are happy to wait a little longer for their car. Buying a BMW is an emotional decision and I think some waiting makes the experience even better.” Of course, it remains to be seen what will happen to the competitive position of BMW and Mercedes-Benz if other manufacturers can deliver faster and at a more favorable price after the chip shortage.