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BMW reported an increase in deliveries last quarter amid unprecedented supply chain crisis.

The luxury automaker credits strong factory-dealer communications as the reason dealers could sell into the pipeline.

The German automaker's first-quarter sales rose 3.2% to 73,714 vehicles as total U.S. luxury sales dipped 10% to 503,709 cars and light trucks.

 Mark Smith, president of Principle Auto in San Antonio, told Automotive News that BMW is "doing a tremendous job to get cars to us any which way they can."

The brand is taking a "we're not going to let it whip us attitude" to the industry's supply chain challenges, said Smith, who operates two BMW stores.

BMW had to pause production at German and other European plants after the Russian invasion of Ukraine suspended deliveries of wire harnesses, which are vital for vehicle electrical systems.

When BMW discovered this supply issue, Smith said, it told dealers: "We're going to miss some cars this month, but we've got supply chains in other parts of the world where we can make them."

BMW National Dealer Forum Chairman David Sloane told Automotive News that frequent communication between the factory and dealers has "made the difference."

He said management keeps dealers informed about near-term production outlooks and available inventory. This information, he reported, allows dealers to accurately inform customers when a vehicle will arrive and confidently sell into the pipeline.

"If we don't know far enough out what product is coming and when, it's much harder for us to presell those cars,” he noted.

Tightened inventories in the automotive industry have slowed sales growth across the industry.

LMC Automotive and J.D. Power forecast a U.S. light-vehicle sales total of 15.3 million, down from an earlier forecast of 15.9 million. Cox Automotive also lowered its 2022 forecast from 16 million to 15.3 million.

BMW, which has claimed the U.S. luxury sales crown for the past three years, has solidified its lead over its legacy brand rivals. But industry analysts suggest Tesla, which does not break out sales by market, has likely overtaken BMW in the luxury segment.

The Automotive News Research & Data Center estimates Tesla delivered 110,000 cars and crossovers in Q1, up 42% from 2021. This gives Tesla over one-fifth of all luxury segment sales in the quarter.

Meanwhile, Mercedes-Benz continues to lose ground because of production shortfalls due to tight semiconductor supplies. Its Q1 deliveries dropped 20% to 62,251.

Audi reported sales of 35,505 in the quarter, down 35% from 2021.

According to Cox Automotive data, as of March 21, BMW had a 30-day supply, compared with a 37-day pool for the overall luxury segment.

Originally posted on Auto Dealer Today

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