Best time to buy a roadster is now **especially a BMW Z4**
07-07-2004, 04:38 PM
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Best time to buy a roadster is now **especially a BMW Z4**
Summer's a bummer for 2-seaters as sales of roadsters, especially Z4, fall - - By DIANA T. KURYLKO | Automotive News - - Source: Autoweek
NEW YORK -- Summer's here, and the time is right for buying little two-seat convertibles.
Except for one problem: The bottom has dropped out of America's small roadster market. And the newest open-top twin-seater - BMW's Z4 - may have a much deeper problem than other cars in the segment.
Analysts say buyers are rejecting the Z4's razor-edged looks, causing sales to plummet much earlier in its life cycle than the Z3 it replaced.
The entire niche is in trouble. Roadster sales are down 21.1 percent in the first half of 2004 compared with the year-ago period. In June, the peak of the convertible-buying season, sales were off 20.1 percent from the June 2003 figure.
Some industry experts say that's because the economy has not been robust, and cars such as the Z4, Mercedes-Benz SLK and Porsche Boxster are more sensitive to economic conditions than larger and more expensive convertibles.
Also, with the exception of the Z4, the cars in the segment are old. The SLK and Boxster are in their final model year of sales. The Audi TT, Honda S2000 and Mazda Miata all have been on the market since the 1990s.
"The roadster segment could have had its day," says Steve Saxty, a partner in Powerbrand Associates, a New York consulting firm. "There is a discrete amount of money to buy a $30,000 to $40,000 vehicle. There are alternate options like an SUV or a Mini Cooper if there is nothing attractive in the segment."
The Z4, introduced in 2002, is the surprise loser. Sales of the BMW model have plunged 25.4 percent in the first six months of this year to 7,359 vehicles, and that's with hefty dealer cash on the hood. BMW is offering $3,500 for the 2.5-liter model and $4,500 for the 3.0 version.
The big incentives are surprising considering the Z4's age, says Jeff Schuster, executive director of global forecasting for J.D. Power and Associates in Troy, Mich.
"That is a substantial incentive even in today's world," says Schuster. "I would imagine they did not anticipate the falloff in sales to happen this soon."
Sales of BMW's Z3 roadster ran at about 20,000 units annually during the third, fourth and fifth years of its life cycle, from 1997 to 1999. The Z4 surpassed 20,000 sales last year but began to decline early in its second year.
Saxty says the Z4 should have pulled up the small convertible category, not the other way around. "The Z4 should have stimulated interest to the point that you see a major uplift in that segment," he says. "It should have brought people into that segment."
Analysts put most of the blame for the Z4's early slide on the car's styling.
"It is definitely related to the style direction taken with the product," Schuster says of the sales downturn. "They went out on a limb with the design, and it has an impact on the faster falloff of sales compared to what the Z3 did."
Saxty says BMW may have erred by making the Z4 slightly more expensive than Z3. But he says design is important in the segment. "It is a fashion statement to buy such a product," he says. "The Z4 has controversy and in that segment people do not want to buy into controversy."
Says George Peterson, president of AutoPacific, a consulting firm in Tustin, Calif.: "The Z4 is not particularly pretty. The interior is relatively spartan. The people who bought it initially were able to overlook that, but the vehicle is no longer a fad or fashion, and people have a hard time with it."
Fritz Hitchcock, owner of South Bay BMW in Hermosa Beach, Calif., doesn't think styling is the issue.
"The price point may have something to with it," says Hitchcock, one of the country's top 30 BMW dealers. "They took an aggressive price point on it just like the 5 series. It is substantially more expensive. That may affect sales. It may not be everyone's first car and for a second or third car it may be little pricey."
The Z4 2.5i starts at $34,295, including destination. The 3.0i has a sticker price of $41,595. Before it was phased out, the Z3 2.5 liter was priced at $31,945 and the Z3 3.0i has a sticker price of $38,345.
Hitchcock says there is "not a lot of awareness of the product. They have a big product line and there is not that much public awareness of the product."
Ed Robinson, executive vice president for operations at BMW of North America, also says the Z4's design is not a problem. He says sales are down because the overall roadster segment is off.
And he noted that the car's sales rate was better in June than in May. While the segment was off 20.1 percent during June, the Z4's year-to-year decline was just 4.7 percent.
"This tells me there is a cyclical variation that takes place," says Robinson.
But analysts say incentives are keeping Z4 sales afloat. Although BMW rarely offers large spiffs, the Z4 incentives began last winter, when the vehicle was just over a year old.
BMW put a $1,200 dealer cash incentive on the 2.5i and $2,000 on the 3.0i.
The incentive was increased in May to $3,500 for the 2.5-liter model and $4,500 for the 3.0 version.
Robinson says BMW will continue to offer incentives. He says there is intense competition in the segment as Mercedes-Benz and Porsche run out their models.
"It is still the summer and a good opportunity in the market," he says. "We will maintain an active position in July."
NEW YORK -- Summer's here, and the time is right for buying little two-seat convertibles.
Except for one problem: The bottom has dropped out of America's small roadster market. And the newest open-top twin-seater - BMW's Z4 - may have a much deeper problem than other cars in the segment.
Analysts say buyers are rejecting the Z4's razor-edged looks, causing sales to plummet much earlier in its life cycle than the Z3 it replaced.
The entire niche is in trouble. Roadster sales are down 21.1 percent in the first half of 2004 compared with the year-ago period. In June, the peak of the convertible-buying season, sales were off 20.1 percent from the June 2003 figure.
Some industry experts say that's because the economy has not been robust, and cars such as the Z4, Mercedes-Benz SLK and Porsche Boxster are more sensitive to economic conditions than larger and more expensive convertibles.
Also, with the exception of the Z4, the cars in the segment are old. The SLK and Boxster are in their final model year of sales. The Audi TT, Honda S2000 and Mazda Miata all have been on the market since the 1990s.
"The roadster segment could have had its day," says Steve Saxty, a partner in Powerbrand Associates, a New York consulting firm. "There is a discrete amount of money to buy a $30,000 to $40,000 vehicle. There are alternate options like an SUV or a Mini Cooper if there is nothing attractive in the segment."
The Z4, introduced in 2002, is the surprise loser. Sales of the BMW model have plunged 25.4 percent in the first six months of this year to 7,359 vehicles, and that's with hefty dealer cash on the hood. BMW is offering $3,500 for the 2.5-liter model and $4,500 for the 3.0 version.
The big incentives are surprising considering the Z4's age, says Jeff Schuster, executive director of global forecasting for J.D. Power and Associates in Troy, Mich.
"That is a substantial incentive even in today's world," says Schuster. "I would imagine they did not anticipate the falloff in sales to happen this soon."
Sales of BMW's Z3 roadster ran at about 20,000 units annually during the third, fourth and fifth years of its life cycle, from 1997 to 1999. The Z4 surpassed 20,000 sales last year but began to decline early in its second year.
Saxty says the Z4 should have pulled up the small convertible category, not the other way around. "The Z4 should have stimulated interest to the point that you see a major uplift in that segment," he says. "It should have brought people into that segment."
Analysts put most of the blame for the Z4's early slide on the car's styling.
"It is definitely related to the style direction taken with the product," Schuster says of the sales downturn. "They went out on a limb with the design, and it has an impact on the faster falloff of sales compared to what the Z3 did."
Saxty says BMW may have erred by making the Z4 slightly more expensive than Z3. But he says design is important in the segment. "It is a fashion statement to buy such a product," he says. "The Z4 has controversy and in that segment people do not want to buy into controversy."
Says George Peterson, president of AutoPacific, a consulting firm in Tustin, Calif.: "The Z4 is not particularly pretty. The interior is relatively spartan. The people who bought it initially were able to overlook that, but the vehicle is no longer a fad or fashion, and people have a hard time with it."
Fritz Hitchcock, owner of South Bay BMW in Hermosa Beach, Calif., doesn't think styling is the issue.
"The price point may have something to with it," says Hitchcock, one of the country's top 30 BMW dealers. "They took an aggressive price point on it just like the 5 series. It is substantially more expensive. That may affect sales. It may not be everyone's first car and for a second or third car it may be little pricey."
The Z4 2.5i starts at $34,295, including destination. The 3.0i has a sticker price of $41,595. Before it was phased out, the Z3 2.5 liter was priced at $31,945 and the Z3 3.0i has a sticker price of $38,345.
Hitchcock says there is "not a lot of awareness of the product. They have a big product line and there is not that much public awareness of the product."
Ed Robinson, executive vice president for operations at BMW of North America, also says the Z4's design is not a problem. He says sales are down because the overall roadster segment is off.
And he noted that the car's sales rate was better in June than in May. While the segment was off 20.1 percent during June, the Z4's year-to-year decline was just 4.7 percent.
"This tells me there is a cyclical variation that takes place," says Robinson.
But analysts say incentives are keeping Z4 sales afloat. Although BMW rarely offers large spiffs, the Z4 incentives began last winter, when the vehicle was just over a year old.
BMW put a $1,200 dealer cash incentive on the 2.5i and $2,000 on the 3.0i.
The incentive was increased in May to $3,500 for the 2.5-liter model and $4,500 for the 3.0 version.
Robinson says BMW will continue to offer incentives. He says there is intense competition in the segment as Mercedes-Benz and Porsche run out their models.
"It is still the summer and a good opportunity in the market," he says. "We will maintain an active position in July."
07-07-2004, 05:41 PM
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Hmm...I was looking at an 04 S2000 a couple months back...they wouldn't budge on the price at all saying it sold too well. Well, if sales are down on it, I might be able to get a deal after all.
07-07-2004, 06:45 PM
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Originally Posted by charliemike
I don't understand why the Z4 isn't selling ... I love the 3.0i with the 18s 
The BMW Films that it was in were awesome.
The BMW Films that it was in were awesome.
I dont get it either...it looks
07-08-2004, 08:48 AM
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A friend of mine traded his X5 for a Z4. His first mod: a rear view camera! 
07-08-2004, 11:30 AM
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Originally Posted by AcuraFan
Hmm...I was looking at an 04 S2000 a couple months back...they wouldn't budge on the price at all saying it sold too well. Well, if sales are down on it, I might be able to get a deal after all.
Plus different dealers react differently for the same vehicle many times. Too many factors.
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07-09-2004, 07:26 AM
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Originally Posted by F23A4
A friend of mine traded his X5 for a Z4. His first mod: a rear view camera!
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