bmw and mercedes fight it out every year for the largest premium automaker crown by chris hughesthe auto industrys yuletide gift to investors turns out to be another dent in its credibility familycontrolled bmw ag has a reputation for being run conservatively and yet its become the subject of an investigation by the us securities and exchange commission into how it accounts for us salesits getting harder and harder to rely on numbers provided by the auto industry whether were talking emissions figures or financial performancethe alleged practices are unlikely to have yielded seismic benefits to the germany luxury car giant dealers may have registered cars as sold when the vehicles were still on the forecourt according to the wall street journal advt the possible scenario is that retailers sold cars to themselves thereby inflating bmws monthly sales figures then marketed them as nearly new at a discount the vehicles would technically be secondhand but have limited mileage having been used as demonstrators or loan cars for customers of the service department bmw said it had been contacted by the sec and would cooperate fullythere are limits to how many vehicles a dealer can sell in this way so even if malpractice is proven its questionable whether it would have plumped up the carmakers sales volumes that much whats more history suggests the financial impact of the regulatory response could be muted fiat chrysler automobiles nv paid just 40 million to settle similar charges from the sec that it misled investors about its monthly us sales figuresbut the fact remains that theres sometimes a difference between what a reasonable person might understand as a car sale a customer buying a car from a retailer and what the manufacturers and dealers call a car sale that leaves investors in the dark the urge to demonstrate leadership of the us market is intense because it brings marketing bragging rights which might explain some of the pressure to increase sales figures bmw and mercedes fight it out every year for the largest premium automaker crown clearly this development is not what bmw needs it may not have been at the center of the industrys recent emissions and financial scandals but its not been immune and investors are concerned that the carmakers range is getting tired and that it needs to accelerate its electric vehicle program advt meanwhile the alleged episode adds to the impression that this is a cheating industry with consumers and investors regularly hoodwinked that will probably increase the carmakers cost of capital which will depress share prices in turn that will make companies feel they need to do more to show they are performing on revenue metrics and so it goes on stiffer penalties might force the industry into financial reporting that means what it says and break the cycle read alsobmw aims to double ev sales by 2021 bloomberg published on dec 25 2019 at 1002 am ist telegram facebook copy link be the first one to