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BMW Widens Gap with Mercedes-Benz and Audi on May's Global Sales
9 Jun 08
BMW led the sales growth of premium carmakers in May as 1-Series variants drove volume increases.
Global Insight Perspective | | Significance | BMW maintained its lead over its rival premium carmakers with combined volume rising 2% in the month to 111,000 while Mercedes-Benz posted a 5.1% decline in the month to 98,000 units. Audi managed a modest increase of 0.8% to 88,200 units. | Implications | BMW managed to extend its lead as the world's leading premium passenger car manufacturer by volume largely as a result of continuing strong demand for the 1-Series as a result of additions to the model range. By way of contrast Mercedes-Benz suffered from a sizeable 23% y/y fall in sales of it’s A and B-Class model ranges. | Outlook | The short-term prospects of the U.S. economy and rising oil prices are all potentially limiting factors, but BMW, Mercedes-Benz and Audi are all targeting record sales volume for the calendar year due to the continuing robust nature of global demand for premium vehicles. |
BMW Leads Sales Growth in May The world's leading premium passenger car manufacturer by sales volume, BMW, extended its lead over its two main rivals Mercedes-Benz and Audi in May as it recorded the highest growth rate for combined global sales during the month. However, despite putting in the best sales performance of all its rivals, BMW still only generated year-on-year (y/y) sales growth of 2% in May, posting combined global brand sales of almost 110,700 units according to a BMW press release. However, this increase was entirely reliant on strong sales of the 1-Series which accounted for a fifth of all new BMW passenger car sales in May 2008, with the introduction of the convertible, coupé and three-door versions doubling the model's sales volume in the year comparison with sales rising 102.1% y/y to 22,090 units. After a strong start to the year in terms of sales growth, Mercedes-Benz suffered something of a reverse in May, experiencing a combined fall in sales of 5.1% to 98,100 units, partly as a result of an sizeable drop-off in sales for its A and B-Class models, which in Europe alone fell by 23% y/y. However, the fact that the model is about to receive a face-lift would account for this drop as savvy consumers wait for the new model to be introduced. Audi retained its position as Germany's and the world's third largest premium car manufacturer in May. The company saw its global brand sales rise by 0.8% y/y to 88,200 units as a result of the Avant versions of the company's best-selling A4 being rolled out fully later in the year. As a result the uplift from the launch of the sedans versions of the new A4 has been limited, but the availability of the full range will start to boost sales significantly from August once production of the A4 Avant reaches full capacity. In a statement Audi Board Member for Marketing and Sales Peter Schwarzenbauer said, "The A4 Avant is critically important for our sales figures: In Europe alone, where we sell around 70% of our vehicles, the Avant accounts for 60% of our highest-volume model range." May 2008 Combined Global Brand Passenger Car Sales for BMW, Mercedes-Benz and Audi | Manufacturer | May Sales | Growth (%) | YTD Sales | Growth (%) | BMW | 110,700 | 2.0 | 516,000 | 4.4 | Mercedes-Benz | 98,100 | -5.1 | 493,200 | 5.3 | Audi | 88,200 | 0.8 | 426,200 | 1.5 |
In terms of the year-to-date (YTD) figures for all three German premium carmakers, BMW remains on top of the tree with combined global brand sales of 516,000 units which equates to a sales increase of 4.4% y/y. BMW is expecting a strong second half of the year as a result of the launch of the new X6 sports-activity coupé. It has been on sale in the United States since late April and has been in the European market since the end of May. However, despite the short sales period Over the past five weeks a total of 2,652 vehicles have already been sold. In May 1,730 units were delivered to customers. The model will be released in Japan in late June and in China in August. Ian Robertson, BMW's Sales and Marketing board member said: "Our order-books for the X6 are already full for the rest of 2008. The success of the X6 shows that plenty of customers were waiting for a vehicle like this." However, Mercedes-Benz has managed to close the gap on BMW, (despite the relatively poor sales figures posted in May) with sales of 493,200 units in the January to May period which equated to a y/y rise of 5.3% to 493,200 units. Perhaps surprisingly, Audi is the worst performing of the "big three" premium carmakers in terms of YTD sales growth of only 1.5% y/y to 426,200 units. The small overall growth rate that was generated was helped by strong sales in China, which grew by 23% y/y, and an increase in sales of 4.9% y/y in the U.K. passenger car market. Despite Audi recording a lower YTD sales growth rate than its rivals, CEO Rupert Stadler is confident of the company reaching its full-year sales of target. He said, "We have set a sales target of one million vehicles for 2008, expecting strong year-on-year growth in the second half." However, the company's relatively poor performance in the U.S. market in comparison to its rivals remains a concern for Audi's management team. Outlook and Implications Despite the fact that they are operating in a much harsher economic environment than they were 12 months ago, Germany's premium carmakers continue to perform strongly and all would appear to be on target to post another year of record sales volumes in 2008. The U.S. market and the effect of high oil prices remains the primary operating concern for BMW, Mercedes-Benz and Audi. The U.S. market has been hit hard by the credit crunch and the ensuing increasing restrictions on credit being offered to consumers to buy big ticket items such as passenger cars. The problems in the credit markets and the continuing upward pressure on oil prices could potentially combine to create a much harsher economic environment in the second half of the calendar year. However, any effects appear to be limited with BMW posting a 3.4% increase in YTD sales in North America to 35,000 units. Any further deterioration in the second half of 2008 is likely to have more of an adverse effect on BMW and Mercedes-Benz than it would on Audi as a result of the latter's weaker position in the U.S. market. However, Audi's poor performance in the United States is currently a hot topic for debate among Audi's senior management, and it appears to have been noted by the VW Group's largest shareholder, Porsche. If Porsche manage to gain full management control of Audi as part of its planned takeover of VW, the company's U.S. operations are likely to get a root and branch overhaul. However, the performance of all three companies remains extremely strong in Asia. Audi's sales rose by 20.6% y/y in the Asia-Pacific region to 65,000 units, while BMW also recorded positive growth of 6.9% in Asia, although its market position is much weaker than Audi's, with only 13,210 units. So in overall terms the outlook is still highly positive for Germany's premium carmakers, although any potential knock-on effect of a further deterioration of the U.S. economy and further rises in oil prices should not be underestimated.
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