When our colleague was invited to attend a BMW test day (here in the land of Brexit and Glory) he elected to opt-out of sitting through the marketing presentation. Or as he referred to it, the mind and opinion control session. BMW noticed his absence during the ‘mind and opinion control session’ and from that day forth he and the Daily car Blog was effectively blacklisted. Most of these car manufacturer presentations are full of facts and for want of a better word, corporate boasting. A typical presentation goes like this. More sales, improved efficiency, bigger better bada-bing-bada-boom, “we’re better than Mercedes and Audi”.
None of these professionally presented PowerPoint facts are verifiable. Motoring journalists often sit through the presentations taking notes with doe-eyed content. Well, in all honesty, they endure the presentations because they are way too polite to say “get on with it, we just want to drive!”. This lack of curiosity from highly trained motoring journalists often allows car manufactures to operate with a sense of impunity. That’s why we have dieselgate, that’s why we have all manner of product recalls.
And another example is BMW inflating their US sales figures. BMW employs the best marketing and sales people who are well remunerated to simply spout lies. In marketing, a well-constructed lie is often seen as being creative. And it seems the U.S. Securities and Exchange Commission has seen through BMW’s lies (upon lies) by levying an $18 million fine for “disclosing inaccurate and misleading sales figures”.
BMW’s hustle was simple, if they sold 80,000 vehicles in one calendar month they would only report 78,000 vehicles sold. The remaining undeclared 2,000 vehicles sold would then carry over into the next month. And if the following month’s sales were below target the undeclared sales would be added to top up the figures. Doing so gave the impression that BMW was on a continual upward trend and that demand is high.
This continual and artificial upward sales trend would in-turn catch the ever-watchful eye of the stock investor. Share traders rely on nothing other than confidence. News of BMW’s strong U.S. sales will send share prices up. And if you are privy to this dodgy sales practice, and have shares in BMW (like a BMW board member) you can buy shares on the cheap one month and sell at a profit the next.
That’s how the game is played folks and such a business practice is illegal for any company listed on the stock markets. If a private investor did this then they would be fined and jailed. But jailing members of a high profile company could have negative consequences politically. So it’s just a fine, easily affordable for BMW. It will surely happen again because it has so often happened before.
