In this week's issue:

• BMW Brand Sales Fall, Mini Still Popular
• On the Hunt for Motoring Bargains

  BMW Brand Sales Fall, Mini Still Popular

BMW says it sold nearly seven percent fewer BMW brand cars last month than a year earlier as buyers stayed away from its key 5-series saloon ahead of a replacement due in July.

The Munich-based company sold 88,450 BMW passenger cars in March, 6.7 percent fewer than a year ago, although the continued popularity of its iconic Mini hatchback meant group sales slipped just one percent to 106,950 units.

Sliding sales of the 5-series saloon, a major profit driver, combined with a blip in sales of the smaller 3-series as updated coupe and convertible variants hit the market in March, were behind the BMW brand weakness.

The figures put BMW behind key rival Mercedes, the luxury unit of DaimlerChrysler , which said last week it had sold 102,400 Mercedes-Benz passenger cars in March, only a marginal drop from the previous year with weak home demand taking the shine off stronger U.S. sales.

BMW group sales in the first three months of the year were up 0.5 percent at 261,570 units, buoyed by the Mini, while brand sales were down 7.3 percent at 215,770 vehicles. BMW Chief Executive Helmut Panke said at the group's annual news conference earlier this month he expected core brand sales would slump eight percent in the first quarter.

The success of the iconic Mini, a modern version of the British 1960s cult classic, has taken BMW executives by surprise, and the company has said it expects to increase production at its plant in Oxford, England by around 10 percent over the next few years.

Mini sales rose 40 percent in March from the previous year and were up by two thirds in the first quarter to 45,810 units. Investors had initially worried that BMW would struggle to make much profit on a product aimed squarely at the lower-margin small car market, but the company says it now makes money on every Mini it sells.

  On the Hunt for Motoring Bargains

Chevrolet has not enjoyed a good first quarter in the UK. The American car giant, a division of the even more enormous General Motors, has seen sales plummet by 82% against the same period last year. And do you know how many cars they actually sold in the first quarter of 2003? Two!

Two cars in three months. Now Chevrolet is by no means a volume manufacturer in Britain, but they most certainly are in the U.S. You might have imagined it could sell more than two thirds of a car per month over here with a range that includes the legendary Corvette, except that the Chevrolet range in the UK is the Corvette. That's it. Even though, relatively speaking, General Motors is struggling in the U.S. just now, it still sold over half a million Chevys in the first quarter and yet in the UK we bought just two.

But I think I know why this is. While the Corvette is officially the only model on sale in the UK, there is no official place to buy one. Chevrolet Europe's own website only lists 11 service centres, one of which is a Vauxhall garage in Milton Keynes. Which is bizarre and rather makes you wonder how they even managed to sell two cars.

It's a shame really. A shame for you and me because the Corvette is that rare thing ­ a decent American sports car ­ but moreover, a shame for General Motors because in Britain just now, manufacturers have apparently never had it so good.

The end of March saw announcement after announcement reveal that the majority of car makers were selling more vehicles than ever before. Overall, the figures for March 2003 were up 3.4% on last year's record-breaking 423,727, helping put predictions for an annual total of 2.4 million new car registrations for this year back on track. OK, big deal you may think, but during February the prophets of doom (also known as industry experts) were predicting very bad things for the first quarter because January and February had been relatively flat.

A Love Affair with Cars

So why the big turnaround? First of all, in Britain we still love to buy a new car with a new registration number. Despite the fact that we now have two such changes each year (in March and September), a nation of car-buyers enjoy keeping up appearances with a shiny new car on a shiny new licence plate. Secondly, at the end of any quarter (in this case, the end of March) dealers are willing to see salesmen gnaw each other's legs off to secure extra sales because meeting the quarterly quota has a dramatic impact on dealer bonuses. And finally (and of far more interest) is the dazzling array of spectacular deals currently available from manufacturers, designed to encourage us to buy new cars.

Among those claiming stunning sales success stories so far this year is Citroen with retail sales up 20%, a record-breaking March performance (24,668 cars sold) and, as a result, a best ever first quarter. This quirky French brand has now replaced another (Renault) as Britainıs fifth best-selling car builder. Sacre bleu, how did that happen?

Simple really, and it has nothing to do with being French. Imagine you were considering the purchase of a new mid-market family saloon. Broadly speaking, Ford, Vauxhall, Rover, Peugeot, Renault, Citroen (and anyone else I may have forgotten) could offer you equally acceptable, similarly priced vehicles and, by and large, any of these manufacturers' dealers could supply the car in your preferred choice of colour, some time in the next week or so. Well, there isn't much to distinguish one car from another, so why should the retail experience be any different?

Except that the chap at Citroen took you to one side and reminded you that if you bought a shiny new C5 from him, you would also find £3,500 in neat, crisp tenners sitting in the glovebox as you drove it off the forecourt. So that'll be a nice new Citroen you're driving then.

In the interests of avoiding any legal unpleasantness, it should be made clear that Citroen has simply been energetically promoting another of its cash-back offers on a number of models this year, and it is by no means alone. The £3,500 offer is still available on the C5 model until the end of April, and similarly you can save up to £2,600 on a Picasso, but this is just the tip of the iceberg.

A Bundle of Offers

Earlier this year, Chrysler decided it could afford to offer around two grand off the price of a PT Cruiser and promoted the spectacularly creative '£2003 cash back in 2003' offer during February and March. Questionable but convenient numerical phraseology aside, the campaign was a big success (since then, prices across the entire PT range have dropped, but that's another story).

And so it goes on. Car retailing is a ruthless business. Mitsubishi, Land Rover, Hyundai, Mercedes-Benz, to name but four, have all been shouting loud this month about breaking all-time records in March and/or the first quarter of 2003. And there appears to be no end to the sparkling offers available for the consumer. At Peugeot, the deals include free insurance and price reductions across the range while both the 406 and 607 models can be financed at 0% and just 35% deposit. But you wouldn't be fooled into thinking this is because Peugeot feels charitable, would you? Wherever you find a bargain (or sales incentive), you will always find a marketing objective. The 406 is at the end of its lifecycle and the 607 is a bit of an outcast in the luxury saloon sector, so they're bound to want to chivvy sales on a bit, aren't they?

At Ford dealerships across Britain, you will find similarly tempting insurance, 0% finance and cash-back offers on a bewildering range of special-edition models. Try out the Focus MP3, the Focus Elle or the Mondeo Graphite for size.

But spare a thought for poor old Rover, a relative novice in the serious price promotion marketplace. Or at least they were. Rover has just announced a quite remarkable scheme for the summer, known as the 'Bring Us Any Genuine Offer And We'll Beat It' campaign. And I'm not joking. This is its official title and a little flotilla of 25 Rover 25s (how on earth do they think them up?) is currently clogging-up the roads of Britain to help promote the scheme. Rover says that each of the special promo-cars represents one of 25 'deals' to be had on its range of cars and not only includes the popular carrots of 0% finance, cash-back and free insurance but also extends to free fuel, free servicing and a contribution to any deposit that may be required. But that is a mere six 'deals' - what can be left? Mortgage relief? Private medical insurance? Subsidised lap-dancing excursions?

Key to Rover's proposition is the mention of its objective to beat any other (genuine) manufacturer's offer and this is the biggest clue to what is actually going on here. Every manufacturer, be they 'volume' or 'prestige', is currently trying to over-supply the marketplace in the pursuit of greater market share and increased profit. The only difference between posh and tosh is in the sales promotion techniques they use. Even Volkswagen is getting in on the action (remember the preposterous commercials featuring customers who think the dealer has perhaps undercharged them?) and while you won't find any luminous banners or garish window stickers in a Mercedes-Benz or BMW dealership, you will find them offering better deals than ever before, particularly in the last week of a quarter. Naturally, these marques cannot be seen to openly beg, yet behind the scenes BMW dealers (among others) are wistfully leafing through bunting catalogues and dreaming up winsome sales patter.

But apparently, consumer confidence in these cut-price offers is on the wane. "It's a natural question," according to Steve Evans of CarPriceCheck.com, an independent motoring marketplace monitor, "that if Citroen can slash up to £2,500 off its models, why can't Peugeot (its sister company), do the same? And if VW can cut £900 off Polo models this year why couldn't they do it last?"

What a pound of tripe! Sure, as consumers we might answer a survey question and say that car prices in the UK are too high, but if a dealer offers us a few grand off the list price because he's been told to and throws in a nice new telly, a personal organiser and a holiday in St Lucia for free, then what do we care? It's the dealers we should feel sorry for. The manufacturers are putting increasing pressure on their networks to sell more cars but are also squeezing their dealer margins on shifting the extra metal.

Cash is King

And the moral of the story is? Buy a car at the end of each quarter, ideally March or September, and always wait until the last week. Be prepared to be flexible on what you're looking for and go to your dealer with a large bag of cash. You'll be able to drive an excellent bargain, as well as a shiny new car with a shiny new licence plate, and even the dealer might get a break by reaching his target for the period. And it's a technique that will work at the swanky, smoked-glass end of the marketplace too. At the end of the day, more sales equal more bonuses, no matter what the badge on the bonnet may say.

Unless, of course, it says Chevrolet. It seems impossible to imagine, but think about it ­ if you and a friend bought a Corvette this month, it would double Chevrolet's UK sales for the year. The tricky bit is, I've no idea who you'd call to buy one.