#17 - BM$'s

The car market is a funny place to be at the minute. We find ourselves in a fear induced limbo where a combination of global economic slowdown, Brexit and general negative lethargy mean the easiest thing for us as consumers to do is sit on our hands and spectate as the world goes by. It’s a frustrating and self-fulfilling vaticination where our inactivity is only likely to worsen the situation……fear not though, BMW think they have an answer.

Incessant over extension of model lines is something that is not new in the car market. For a long time manufacturers have believed that creating a smorgasbord of options for customers to choose from is the best way to satisfy them…….it’s not. However, the most recent evolution of this is the mid-life cycle facelift. In essence, manufacturers think that a slightly revised headlight configuration or new satnav system breathes new life into a car and with it, more sales. In fact, such is their belief that the mid-life cycle facelift is occurring sooner and sooner. At the forefront of this trend, our favourite Bavarians, BMW. They have coined the phrase LCI or Life Cycle Impulse (catchy I know) to highlight the facelift their models receive after being in production for 3 years. However, they now do something even more creative/sneaky depending on how you think about it.

In 2016, they gave us the BMW M2 which cost ~£44k OTR in base spec. Roll forward 2 years and they released the BMW M2 Competition which cost ~£48.5k OTR in base spec….clever move. 2 years is the perfect time period for many customers to start thinking about changing cars and trading up. So BMW buy the old M2 off you and sell you a shiny new M2 Comp. But what if you don’t want an M2 Comp, what if you just want another standard M2…….. “well sir/madam, we don’t make that one anymore. The M2 Comp is now the base model”. I’m sorry, you have increased the cost of the base M2 by nearly £5k in 2 years when UK inflation has been sub 2%.......that’s taking the p*ss. Now of course the marketing spin doctors will be quick to highlight that the M2 Comp is a very different car to the original M2 but we can’t help but feel that they had the tools and technology to build the M2 Comp back in 2016…..they just chose not to use them. Well guess what…..they are at it again and this time you are going to need an even bigger cheque book.

The “CS” nomenclature in BMW terms has historically referred to a halfway house in their model range between the base car and top of the range CSL….sporty but not the sportiest. In a lot of ways it’s like premium economy, a taster of high life travel but not enough to make you think this should be your final resting point. However, in more modern times they have been very un-Germanic in muddying the waters around the true model hierarchy. Base has been replaced with Competition although is still meant to be superior, CSL has been replaced with GTS although CSL is still meant to exist as an option for them and CS can sometimes be the top model but other times it’s just the middle one………we have a headache.

This week BMW unofficially launched the M2 CS (someone shared some pics online they shouldn’t have done) and then promptly had to launch it officially…..using the same pictures. As you would expect of the name, it is faster, lighter and more sporty than the M2 Competition it sits above. It’s also predictably more expensive……a lot more. Recall an M2 Comp in base spec is ~£48.5k OTR before options. The new M2 CS…….£75k OTR pre options. That’s 55% more expensive than an M2 Comp, 70% more expensive than the original M2 and the same price as the mega new Porsche 718 Cayman GT4. But it gets better….while we have yet to see the official options pricing list, with carbon ceramic brakes, lighter wheels and sticker tyres all possible additions, we would not be surprised if you could quickly spec one of these up to north of £90k……for an M2!

It’s a pricing decision that simply cannot be justified. Firstly, while at time of writing it currently sits at the top of the M2 range, the CS may well not still be there in another 6 months or a year as the ability for BMW to gazump it and launch a GTS or CSL option is still on the cards and very open to them. Secondly, even if the CS does not get bested by a more special variation, residual values for these cars are going to be horrific. You only have to look at M4 and M3 CS derivatives to get an understanding of the implications. What’s more, the proposition of spending £50k on a baby M car is very different to spending £80k on one. At that price point, the M2 is suddenly put in a market with some much more potent sports and supercars. Let’s not forget you can now pick up a 2 year old McLaren 540C with manufacturer warranty for the same money, a 991.1 Turbo S…..some proper big boy cars. Finally and maybe most importantly, we are not in an organic bull market atm…… so they have to adjust their prices accordingly. If a nearly new M2 Comp won’t sell for less than £40k that should be telling BMW something about consumer sentiment right now.

But don’t let us put too much of a damper on things. If you are one of the lucky few who has got their hands on a build slot……congratulations. The M2 CS will inevitably be a mega car to drive and maybe even a contemporary classic in the future. But as I write this I find myself staring at the 1M Coupe currently sitting in our garage and I can’t help but think…….I know where I would be putting my money.

Happy Motoring,

Greg

Greg Evans