Monday, June 9, 2014

Aggressive retail initiatives arrive at Brazil's premium segment

by Michele Loureiro | michele@autodata.com.br

Aggressive retail initiatives have arrived at the premium vehicles segment of the Brazilian market.
Following similar recent initiatives, such as the one conducted by General Motors, which created a campaign that offers the same employee discounts to every customer who will acquire its vehicles, manufacturers such as Audi, BMW, and Mercedes-Benz implemented new strategies to attract customers this month.

Between May 16 and 25, Audi offered 0% interest rate for its entire product line, with a 50% down payment and up to 20 monthly installments.

Mercedes-Benz is offering 0% interest rate up to Saturday, 31, with a 60% down payment and 24 monthly
installments for its C180 Turbo, C200, CLA 200, B200, and A200 Turbo Style models.

BMW Serviços Financeiros, BMW’s financial arm, went even further and presented on Tuesday, 27 a new
financing plan for two of its Series 3 line products, the 316i and the 320i ActiveFlex. The program calls
for reduced installments and the possibility of repurchasing the vehicle, and is valid at all 44 of the brand’s dealers in the country.

Called the Sign&Go Program, the financing applies the leasing logic, despite being conducted under a DCC, direct consumer credit mode, with bigger installments earlier on and a final amount at the end of the plan, which is known as the balloon installment. 

The BMW 320i ActiveFlex, which is priced at R$ 133,900 (US$ 60,860) cash payment, can be acquired
with a 20% down payment and 24 monthly installments, with 23 of the installments valued at R$ 2,900 (US$
1,318) each. At the end of the period, BMW offers to reacquire the vehicle for, at least, 50% of the model’s cash sales price.

In practice, the customer pays a down payment of R$ 26,700 (US$ 12,136), takes the car, and has a commitment of pain 23 installments valued at almost R$ 3,000 each. At the end of the plan, there will remain a payment valued at R$ 67,000 (US$ 30,450), exactly half of the value of the vehicle BMW agrees to bear. 

With this, the customer can choose to simply return the car and eliminate the debt – if the model’s value is estimated to be above this value since the vehicle manufacturer pays the difference, according to a brand’s dealer in São Paulo consulted by our team – order than simply renews the plan, with similar conditions, and leaves again with a brand-new BMW from the store.

In a note, Josef Lechertshuber, responsible for sales and marketing for Brazil and Latam at BMW Serviços Financeiros, stated the financing plan “is in accordance to the strategy of making BMW product more tangible for Brazilian consumers”.

BMW sold 4,700 units in Brazil from january to april, an annual increase of 37%.

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