Quote:
Originally Posted by chrisny
A little bit of both maybe. They sell (lease) a hell of a lot more cars with the high residuals and resulting low lease prices. Wasn't always this way. I can remember when Audi had better sticker and lease prices on comparable cars. Now, seems they can't touch BMW lease prices, even when their sticker is lower..., nor can most of the other luxury brands. I think it's more about market share and pushing volume than it is about discouraging people from buying them out, though maybe that provides a secondary bonus too.
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Yes, market share is huge. The industry profit model centers on financing, used cars, service, and warranties. New car sales basically serve to drive those four profit centers. It is a tricky balancing act between front end profit, CPO inventory management, maintaining residual values, and of course offering a lasting product. BMW and Lexus excel at this. You can see it in their constant tinkering with lease rates and CPO incentives on the 3-series, as they steer customers into one or the other to maintain a balance. Audi suffers because people fear used VAG products. Cadillac tried the subsidized lease game, but got killed when their terrible residual values undermined their CPO ambitions. Infiniti is in the same boat as Cadillac, with leases so cheap (for second tier products) it makes zero sense to buy new or used.