It wasn't the incentives that killed BMW in US. It was leasing. The viability of leasing crashed when the residual values crashed. BMW NA, like the Big Three and others, thought the good times would always roll; that there would always be some sucker to pay premium for an ex-lease 3yr old, bog standard 3 series. Was the same nonsense as securitisation of mortgage loans being resold at premium with investment grade AAA rating, which blew up America's bubble finance economy in the first place.
Like the US, Britain has lived the high-life on falling real wages. The circle was squared by borrowing. I would estimate at least a half of BMW's extra sales over say ten years ago in US were due to this froth from credit purchasing and healthy leasing residuals. BMW must know internally that the US premium market will settle back about 50% lower than 2007. Overall expect US auto sales to fall back to about 12 million new units from a high of 16 million plus in 2006.
Unless the US authorities can make house prices rise again - which they can't, short of handing out free dollars to everyone - and bring back the millions of relatively high-paying, secure industry jobs exported overseas in the last forty years - which they won't - then the US auto market is a bottomless pit. See the Big Three's demand for a $50bn bailout. What happened to Capitalism in the Land of the Free?
