BMW and Daimler plan to limit volume of premium models even as chip shortages decrease to keep prices high. Premium manufacturers are realizing that, in the midst of the storm, their customers don’t mind waiting or paying more.
“We will consciously underestimate the level of demand and at the same time [cambiaremos] marching to the top end, luxury, “Daimler CFO Harald Wilhelm said at the Financial Times.
“Customers are ready to wait three to four months”
Wilhelm’s remarks mean that the German consortium has realized that both during the pandemic and now, with essential components like microchips in short supply, its customers are predisposed to pay higher prices.
So now the strategy is to reduce the volume and sell more exclusive and also more expensive cars. BMW for its part will follow the same strategy, according to the financial newspaper.
In the Bavarian firm they have detected a “significant improvement in the power of setting prices in the last 24 months”, which has encouraged them to continue with their plan of limit the volume of your products to keep prices at the current level.
This is helping them improve their bottom line even above 2018 levels for Mercedes-Benz.
“Customers are ready to wait three to four months, and this is helping our pricing power,” said BMW CFO Nicolas Peter. “[…] Having a short waiting time is something, I think, that makes the customer experience even greater and better, “he said.
From the consulting firm Bernstein they believe that the pandemic and the semiconductor crisis has put the industry before a different paradigm, with a smaller offer and fewer discounts: in Europe and the US they have fallen at least twice since their pre-pandemic peak.