South African Neels Kilian was as proud as any BMW owner could be when he got his new 3-Series in May. After getting into an accident a few weeks later and still waiting today for repairs, he’s reconsidering that sentiment.
The resident of Gauteng, South Africa, needs a rear fender replaced before the car is drivable again. In the meantime, he’s still making a monthly payment of 8,000 rand ($770) and has to bear additional costs for work travel because he hasn’t been offered a loaner.
“This is shocking!” Kilian wrote in an e-mail. “It is impossible to repair my vehicle; why is BMW unable to issue a warning to customers when buying this brand?”
Kilian is among customers across the globe angered by Bayerische Motoren Werke AG (BMW)’s failure to promptly deliver spare parts to fix their vehicles. BMW, the world’s biggest maker of luxury cars, has struggled since the beginning of June to ship components on time because of a new supply-management system being introduced in its central warehouse in Germany.
The delays have caused ripple effects globally because orders for BMW’s 40 parts-distribution centers originate at the main facility in Dingolfing. The warehouse also directly supplies about 300 repair shops in Germany.
Raimund Nestler -- who lives in Ingolstadt, Germany, the home base of rival Audi AG (NSU) -- has been waiting six weeks for a new part that controls engine speed.
“I have always been a die-hard BMW driver and am currently driving my seventh BMW, but will consider which brand I’ll buy the next time,” he said by phone. “For a premium carmaker like BMW, this is particularly disappointing.”
BMW shares dropped 1.25 euros, or 1.7 percent, to 71.75 euros at the close of trading in Frankfurt. The stock has declined 1.6 percent this year, valuing the Munich-based company at 46.2 billion euros ($61.6 billion).
About 10 percent of parts are not immediately available in Dingolfing because of the logistics changeover, Manfred Grunert, a spokesman for the Munich-based company, said in an e-mail yesterday. BMW has workers on extra shifts to help shorten the wait, and aims to have the new system working properly by early September.
“We deeply regret any inconveniences caused to our customers,” Grunert said in the e-mail.
The logistics troubles come as BMW is under pressure to maintain the global luxury sales crown with both Volkswagen AG (VOW)’s Audi and Daimler AG (DAI)’s Mercedes vowing to nab the top spot by the end of the decade. The longer the delays drag on, the more BMW’s image as a high-end automaker is tarnished.
“The logistics problem is comprehensible, but three months is too long,” said Juergen Pieper, a Bankhaus Metzler analyst in Frankfurt. “Damage has certainly occurred. I see a hit to their reputation and a financial burden of tens of millions.”
The logistics project -- named ATLAS for Advanced parTs Logistics in After Sales -- was started in Dingolfing in 2009, according to a joint press release at the time from International Business Machines Corp. (IBM:US) and SAP AG. (SAP)
IBM, which was the main contractor, said last week that it’s no longer involved in setting up the program. SAP is supplying the software for the warehouse management system, the Walldorf, Germany-based company said. BMW declined to comment on its suppliers.
Mohan Nair from Canada has been waiting eleven weeks for pieces for the protective shell around his BMW motorcycle known as a fairing. In the meantime, he’s resorted to buying a second-hand fairing, which is the wrong color, on EBay to tide him over.
“In Canada, the motorcycle riding season is short -- 6 months if we’re lucky -- so a delay of 3 months basically means half the season is over,” the Toronto resident said. “BMW makes excellent bikes but when you charge this much for a part, you have to make sure it arrives on time.”
Australian Eric Gibson said repairs on his BMW motorcycle have been dragging on for three months. “I can now ride the bike, but I’m still waiting for one more part, a driving light,” Gibson said.
Fellow countryman Lisa Stephenson, who lives in Coolamon, a farming community 480 kilometers (298 miles) northeast of Melbourne, isn’t as fortunate. Her mechanic has advised her not to use her BMW, which she needs to get around in her rural area, because the part that needs replacing could catch the car on fire.
“I’ve been waiting for five weeks for a fuel elbow,” Stephenson said. “My mechanic informed me this week that the part won’t arrive until sometime in October. This is extremely frustrating. Shame on BMW. I am one very unhappy customer.”
BMW is sending components via airfreight to speed up delivery times and is trying to provide replacement vehicles for waiting customers, Grunert said. Stephenson and Kilian both said they haven’t been offered a loaner.
“BMW is unable to inform me when to expect this part in South Africa or when my vehicle would be repaired,” Kilian said. “It could be another four months or so.”
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