Just some other food for thought.
The below chart is based on figures from BMW Annual reports (to Q3 in 2025).
It shows the percentage change since 2002 of BMW's cost of sales per unit delivered. The total is Green, the manufacturing element is Blue, and the rest of the Cost of Sales is Red.
You can see that manufacturing costs generally trended downwards (though the pandemic period shows them climbing a little), which you might expect over time, and it's typically been non manufacturing costs that have driven the overall increase. You can clearly see in 2022 the manufacturing element went through the roof, taking the total way, way up, despite a slight fall in other costs.
There are multiple things that will have contributed to this, and they'd all be up for debate - whatever those reasons are I think it's important to not just think of cost-cutting as needless penny-pinching.
Inflation was the next thing I then looked at...
Again indexed from 2002, using annual inflation numbers from the Euro area, and applying them to the 2002 value shows the dotted lines - the actual values are the sold lines. You can see that ever since the start of the century costs have lagged behind inflation, until a the sharp increase in 2022 - which I think it's fair to view as a correction.
One obvious possibility is the cost of energy. Though it doesn't really track that closely, energy costs in 2020 fell to half what they were in 2016 - by mid 2022 they'd peaked at 375% of what they were in 2016... I'd suggest this plays a part in that 2022 'correction'.
Consider in 2002 a 320i would start from about €27000 in Germany, and using the same inflation numbers as above we'd arrive at a current price of €43700, where it now actually starts at €46600, back in 2020, it should have been ~€35,600 based simply on inflation, but came in at €39,800.
With this in mind - considering only inflation - with manufacturing costs being behind inflation, and vehicle pricing ahead of inflation, I think it's fair to say, that for a couple of decades, BMW was making bank - would it then be any surprise that 'cost cutting measures' weren't really required for models on offer between 2000 and 2020? With the sharp correction in 2022, perhaps this is no longer the case.
Another thing that always comes to my mind, is this slide from the 2022 investor presentation....
... ~40% of total vehicle cost is for the battery pack.
I don't know what that translates to as an overall increase when removing ICE related gubbins... but given that steep increase in costs in 2022, I can't help but wonder if selling more BEVs has also been responsible.
So, going back to inflation, and prices now versus 2002.
The 320i I'm using as an example, has increased in price at around 5% above inflation. In that time it's gained 22% power, 7% higher top speed, 25% reduction in 0-100km/h times, 36% reduction in the amount of fuel it uses and a 40% reduction in the amount of CO2 it emits. All this despite being heavier, but only by about 3%. There's also the quantum leap in terms of infotainment, and safety systems to bundle into all that too.
Tl;dr
We've enjoyed two decades of cars getting better at a rate that considerably out paced the cost of building them, for only a small increase in price. That period has at very least been interrupted, if not ended, and the sudden decline in perceived value which certainly results in less stuff for more money in some cases, is very likely a result of that.
The below chart is based on figures from BMW Annual reports (to Q3 in 2025).
It shows the percentage change since 2002 of BMW's cost of sales per unit delivered. The total is Green, the manufacturing element is Blue, and the rest of the Cost of Sales is Red.
You can see that manufacturing costs generally trended downwards (though the pandemic period shows them climbing a little), which you might expect over time, and it's typically been non manufacturing costs that have driven the overall increase. You can clearly see in 2022 the manufacturing element went through the roof, taking the total way, way up, despite a slight fall in other costs.
There are multiple things that will have contributed to this, and they'd all be up for debate - whatever those reasons are I think it's important to not just think of cost-cutting as needless penny-pinching.
Inflation was the next thing I then looked at...
Again indexed from 2002, using annual inflation numbers from the Euro area, and applying them to the 2002 value shows the dotted lines - the actual values are the sold lines. You can see that ever since the start of the century costs have lagged behind inflation, until a the sharp increase in 2022 - which I think it's fair to view as a correction.
One obvious possibility is the cost of energy. Though it doesn't really track that closely, energy costs in 2020 fell to half what they were in 2016 - by mid 2022 they'd peaked at 375% of what they were in 2016... I'd suggest this plays a part in that 2022 'correction'.
Consider in 2002 a 320i would start from about €27000 in Germany, and using the same inflation numbers as above we'd arrive at a current price of €43700, where it now actually starts at €46600, back in 2020, it should have been ~€35,600 based simply on inflation, but came in at €39,800.
With this in mind - considering only inflation - with manufacturing costs being behind inflation, and vehicle pricing ahead of inflation, I think it's fair to say, that for a couple of decades, BMW was making bank - would it then be any surprise that 'cost cutting measures' weren't really required for models on offer between 2000 and 2020? With the sharp correction in 2022, perhaps this is no longer the case.
Another thing that always comes to my mind, is this slide from the 2022 investor presentation....
... ~40% of total vehicle cost is for the battery pack.
I don't know what that translates to as an overall increase when removing ICE related gubbins... but given that steep increase in costs in 2022, I can't help but wonder if selling more BEVs has also been responsible.
So, going back to inflation, and prices now versus 2002.
The 320i I'm using as an example, has increased in price at around 5% above inflation. In that time it's gained 22% power, 7% higher top speed, 25% reduction in 0-100km/h times, 36% reduction in the amount of fuel it uses and a 40% reduction in the amount of CO2 it emits. All this despite being heavier, but only by about 3%. There's also the quantum leap in terms of infotainment, and safety systems to bundle into all that too.
Tl;dr
We've enjoyed two decades of cars getting better at a rate that considerably out paced the cost of building them, for only a small increase in price. That period has at very least been interrupted, if not ended, and the sudden decline in perceived value which certainly results in less stuff for more money in some cases, is very likely a result of that.
