The disappointed customers and over-pricing of BMW Egypt & Bavarian Auto Group BAG!

Only in very rare occasions do we publish reader's complaint on our front-page in addition to the regular reader's letter section. Today is one of those rare occasions as we received this complaints from another annoyed and disappointed BMW owner, this time a BMW 7 series owner.

We are not surprised that BMW Egypt /Bavarian Auto Group BAG became extremely arrogant and careless in dealing with their customer's complaint, to an extend that they became even bigheaded and inconsiderate with their 7 series owners. This does not surprise us anymore as this is the only logical development after all the complaints we have been hearing and receiving from X1, 118i, 3 series and even 5 series owners.

BMW Egypt / Bavarian Auto Group BAG apparently has no time for taking to take care of their existing BMW customers and their problems as they are busy creating new artificial 'supply shortages' for the complete BMW model range, with of course a special focus on the supply shortage for the imported CBU models, so that they can sell more of the locally-assembled CKD/SKD models which have a profit margin at least three time or four times bigger than the profit margin for the imported BMW models. In some cases the profit margin of the locally-assembled CKD/SKD models reach up to 60% (!) while the profit margin of the BMW models sold in Germany by the BMW AG does not even exceed 10%.

So, while BMW AG headquarter in Munich (Germany) has an EBIT margin of approximately 9-10% and an average profit margin of 3.500 Euros per vehicles, the rough estimate for the net profit margin of a locally-assembled BMW 520i (official selling-price in Egypt: 675.000 LE = approx. 69,160 EUR with the official bank rate) is approximately 225.000 LE, which is around 22.500 Euros. If you add the current overprice premium for the 520i, this net profit margin will go up to 450.000 LE (approx. 45.000 Euros) as the unofficial price tag with over-price in all BMW showrooms is currently 900.000 LE (approx. 90.000 Euros).

What is even more infuriating for new potential BMW customers is that whenever they want to book a car or deposit a down-payment they are told by the BMW Egypt / Bavrian Auto Group sales staff on the phone and on their official Facebook page that they are currently not taking any orders or down-payments. Why? Probably in order to keep the artificial supply shortage very high and consequently keep the over-price high as well. That is why the over-price 'premium' at the BMW dealers and showrooms in Egypt for the 520i model only is currently 225.000 LE, as they ask for 900.000 LE instead of the 'official' but non-existent price of 675.000 LE. For more expensive models like the 530i or the BMW X3 the over-price 'premium' is even higher than 225.000 LE. The BMW 740i was introduced last year for a hefty 1.950.000 LE which already was extremely expensive. Now the 'official' price of the 740i starts at 2.650.000 LE, before adding the over-price.

What I wanted to show with this short explanation of the unprofessional and exploiting sales and marketing strategies which BMW Egypt / Bavarian Auto Group is obviously implementing as a rip-off strategy in Egypt, is that they currently have no time for taking care of the complaints of their existing customers.

Even the article about BMW which was published in the wide-spread and renowned Almasry Alyoum daily newspaper by Ahmed Bahaa, proves that BMW AG in Munich must take the Egyptian market much more serious as they are losing lots of credibility and trust among the existing and the potential BMW customer, due to the extremely unprofessional and dishonest business attitude and incompetent management.

So instead of spending our precious time and energy on other more important and more useful topics such as the 2016 DTM final at the Hockenheim, the FIM Superstock 1000 Cup title win for the S1000 RR, the BMW M4 DTM Champion Edition, or even the all-new 2017 BMW 5 series official unveiling, we find ourselves wasting our time on unnecessary customer's complaint and management analysis because of an amateurish and incompetent management at BMW Egypt Bavarian Auto Group.

I think it is about time that BMW AG board of management should even consider a restructuring of the Egyptian dealership and sole agent situation, just like many other German, Japanese, American and Chinese car manufacturer have done in the past and are also currently still planning, especially since Egypt has around 95-100 million inhabitants now and has a potential of at least 15.000 to 20.000 imported BMW CBU models annually, if priced in a reasonably way and promoted with a professional importer.

I hope the management at BMW AG takes those customers complaints in a serious way in order to restore the credibility and trust damage which BMW Egypt / Bavarian Auto Group has caused over the past few years.

MS
17.10.2016
Cairo – Dubai - Munich