US: BMW to cut free service to give extra bonuses to its dealers image

In a move that will definitely not please many loyal customers, BMW North America will reduce free service intervals from 4 to 3 years starting with the 2017 model year.

The free scheduled maintenance interval offered by the automakers plays an important role in the customers’ decision on buying a new car and many companies are trying to allure buyers by giving an attractive package in this direction. However, BMW believes that a longer free scheduled service does not weigh so much for its customers in North America. The German brand now offers free scheduled maintenance for 4 years/50,000 miles, but the plan is to trim it down to 3 years/36,000 miles starting with the 2017 model year. This decision was made because dealers reported to the top management that more than half of their customers are buying a new car only after three years, thus a longer interval is unnecessary, Ludwig Willisch, CEO of BMW of North America, said in an interview at the Detroit Auto Show. The savings will be used for a monthly bonus given to dealers of 1 percent of the price of new vehicles sold. The reward will be granted to those who reach BMW’s brand standard, customer satisfaction and used-vehicle sales targets, Willisch said.

BMW also simplified its dealer incentive targets and will further change them in 2017 when dealership loyalty rates will replace customer satisfaction survey results. “We had a bonus which is fairly complicated and we did not move the needle” on customer satisfaction, he said. “We needed to make it simpler.” The company will also allow dealers to transfer free scheduled maintenance to a new owner, which is now prohibited.

Via Automotive News