12-24-2019, 02:52 PM | #23 |
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A bit more detail:
BMW Delivers an Unwelcome American Holiday Gift https://www.bloomberg.com/view/artic...with-sec-probe Basically, nothing to fear about... |
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12-24-2019, 03:48 PM | #24 |
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Wrong. I can't say every dealership does this but I know some GTA dealerships actually license the demo's and loaner's to their name so technically, a sale has happened. Definitely a grey area but if a VIN is licensed/registered, it could be viewed as a "sold" unit.
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12-24-2019, 09:43 PM | #25 |
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As an entry level F90 3 series owner, I am here frequently to admire the M! I peruse the websites of flagship dealers in NYC, Miami, LA etc. for observation and/or the next step in a potential purchase, and have noticed this deceptive marketing ploy. The corporate sales/marketing mechanism in action!
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12-25-2019, 05:04 PM | #26 |
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This is a legal and common practice in the UK for all dealers and manufacturers. The dealer themselves would buy the car from BMW and registered them. They are then sold to customers at a very good discount with the dealer being the first owner and customers second owners. The vehicles are generally referred to as pre-registered cars.
This way the dealers are able to get the premiums from the manufacturers for meeting sales targets
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12-27-2019, 12:59 AM | #29 | |
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12-27-2019, 01:17 AM | #30 |
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If indeed it is the punching of cars that is at issue, although that would not be a deceptive practice vis-a-vis customers, I could see it being a problem vis-a-vis investors. I guess it depends on what is disclosed in the quarterly reports and the like. If BMW is reporting punched cars as ordinary sales, without distinguishing them from sales made by dealers directly to ordinary customers, then that might be a problem in the eyes of the SEC. But I'm rusty on securities regulation, so my reasoning could be all wet
Last edited by LexProf; 12-28-2019 at 02:38 AM.. |
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12-28-2019, 08:42 AM | #33 | |
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12-28-2019, 04:41 PM | #34 |
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Agree, as a consumer I don't feel any wrong has been done with the practice of punching cars.
From an investor's point of view, if punching has always been part of the game, then it does not materially affect unit sales, and therefore revenue, when comparing financial time periods such as months, quarters or years. Where I can see trouble from an investor's point of view, is that: - if punching is on the increase, making prior period unit sales incomparable and, or - if punched cars are not reported in either dealer or manufacturer (BMW) inventory valuation Can anyone make a definitive statement on which company, the dealer or the manufacturer, holds title to a punched vehicle? Last edited by chassis; 12-28-2019 at 08:26 PM.. |
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12-28-2019, 05:57 PM | #35 |
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Accounting rules are governed by FASB in the US. Two years ago, "FASB has introduced a plethora of new and revised accounting standards that are certain to impact automotive dealerships nationwide".
https://www.axiom-auto.com/wp-conten...tter-Vol17.pdf I read the newsletter but did not find any specific guidance about revenue recognition of vehicles sold to dealers but not delivered to retail customers. I am sure FASB has an applicable rule. |
12-29-2019, 11:02 AM | #38 | |
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12-29-2019, 01:46 PM | #39 |
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ScottyRyan, thanks. You said the dealer titles the vehicle with the state of MN, correct? That means the state of MN views the dealer as the lawful owner, in which case ownership has passed from the manufacturer to the dealer. Do you agree?
Is this how "punching" works? Title passing from manufacturer to dealer? |
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01-01-2020, 07:43 AM | #40 | |
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Dealers delineate how the cars are “punched” in the Manufactuer’s sales reporting system. For example they have retail, fleet and a code for loaners amongst other types of punches. In Minnesota, like most states, it is illegal to let customers driver cars as loaners with a dealer plate. A healthy fine. Dealer plates are for demonstration purposes. The state also wants to collect tax and license fees too for each loaner too. So the service loaners as others have pointed out normally are sold as CPO when they come out of the loaner pool. Most manufacturers that have a service loaner program and likely operate it similarly. Seems like a money grab for the government. |
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01-01-2020, 08:26 AM | #41 |
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I still don't see who is harmed by the status quo. The Federal government? State government? The consumer? An investor? Is a Federal, state or local statute being violated? The link in the OP does not give the basis for an objection from the SEC.
The only question I see here is whether or not the status quo affects share price, and therefore potentially harming an investor. But an institutional investor will understand how the business fundamentals work, including punching, and I argue that the institutional investor would not be affected by the status quo. So the only party that might be harmed is the unsophisticated retail investor. I argue that the status quo has an immaterial impact on this investor segment. p.s. I drove a service loaner this week from another manufacturer. "Dealer New" plate, state of Indiana. Last edited by chassis; 01-01-2020 at 06:12 PM.. |
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01-02-2020, 12:23 PM | #42 |
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01-03-2020, 11:01 PM | #43 | |
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01-07-2020, 04:43 PM | #44 | |
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