The first-half sales of the German Big Three premium brands continue to prosper, despite the slowdown in Europe
IHS Automotive perspective | |
Significance | BMW extended its lead over Audi and Mercedes-Benz in terms of brand sales in the first half of the year with sales rising by 7.7% y/y in comparison to the 6.4% y/y rises recorded by Audi and Mercedes-Benz during the same period. |
Implications | The German Big Three premium brands continued to record very strong sales, largely thanks to ongoing sales increases in China and the US. However, BMW's advantage over its rivals derived largely from a lower decline in the stalled European market during the first half of the year. |
Outlook | The global performance of the three German volume premium brands continues to impress. Although all three companies continue to depend on ongoing positive sales environments in the US and China in order to maintain growth and for the full year. |
BMW extended its lead over its two main rivals in the first half of the calendar year in brand terms, with sales of BMW brand vehicles rising by 7.7% year-on-year (y/y) to 804,248 in the period, according to company press releases. During the equivalent period the Audi and Mercedes-Benz brands recorded sales increases of 6.4% y/y to 780,500 units and 694,433 units respectively. BMW brand sales were fuelled by a particularly strong performance by its 3-Series and X1 model lines, while the key differentiator between its performance and that of its rivals was the fact that it managed its decline in the European market better than its rivals, again helped by the aforementioned 3-Series and X1 model lines. In the first half of the year BMW 3-Series sales rose by 21.8% y/y to 236,215 units, a figure that was also supported by the 3-Series Touring, while sales of the X1 rose by 22.8% y/y to 79,061 units. The X3 also maintained a strong sales trend with a 5.2% y/y rise to 77,959 units, and the 5-Series also continued to post sale growth of 2.1% y/y to 169,593 units, despite the F10 model entering its fourth year on sale, although second-half sales will be bolstered by the launch of the face-lifted version of the model. In June BMW brand sales rose 9.4% y/y to 153,075 units. On a regional basis, in Group terms, BMW sales fell at a slower rate in Europe than the wider market, and indeed its rival's sales, with volumes down 0.1% y/y to 437,092 units during the first half. In Asia BMW Group sales grew by 14.4% y/y to 237,876 units, with sales in China up 15.0% y/y to 182,800 units, helped by the model changeover of the 3-Series long wheelbase (LWB) since the first half of 2012. Double-digit rises were also recorded in Japan and South Korea. BMW Group sales in the Americas rose by 9.7% y/y in the first half to 213,473 units, with a 9.0% y/y rise in the US to 172,787 units.
Audi's first-half sales were bolstered by a strong performance of its new model lines the A3, Q3 and the face-lifted Q5. As well as the 6.4% y/y rise to 780,500 units in the first half, sales during June rose by 5.5% y/y to 140,300 units. In Europe Audi's sales during the first half of the year posted an inferior performance to BMW's, with sales down 2.5% y/y to 383,700 units. There were, however, some pockets of very positive performance in Europe during the first half, with sales in the UK rising by 11.9% y/y to 74,051 units, with sport utility vehicle (SUV) sales rising 82,7% y/y in the period in the country. Sales were also up in Switzerland by 4.5% y/y to 9,537 units. However, sales in Germany fell by 4.3% y/y to 128,345 units, while there were significant falls in Spain, Italy and France. However, there was better news in the company's other major regional markets, with sales in the US rising by 14.0% y/y to 74,277 units, with the Q5 proving a particular success in the market. Second-half Q5 sales in the US will be bolstered by the addition of the TDI clean diesel and as the high-performance SQ5 TFSI models. Audi enjoys the advantage of being the premium market leading premium brand in China, and sales in the country rose by 17.7% y/y during the first half to 228,139 units, including the highly accelerated rise of 33.5% y/y that was recorded in June to 44.479 units, bolstered by the commencement of local production of the Q3 in April. Sales in Japan and South Korea were also up by 20.9% y/y and 30.0% y/y respectively.
Mercedes-Benz also posted a strong improvement in June and in the first half (see Germany: 4 July 2013: Mercedes-Benz sets H1 sales record with 6.4% rise to 694,433 units) with a 6.4% YTD rise, while Mercedes-Benz brand sales rose by 8.3% y/y to 131,609 units in June, a new record. One highly positive note the company's sales trend in June was a much bigger uplift in sales in China that has been the case in recent months with a 16.0% y/y rise, thanks to the reorganisation of the sales company in the country earlier in the year appearing to pay dividends. Sales in China were up 16.0% y/y during the month to 19,549 units, although this failed to drag the brand's sales back into positive territory for the first half in China, with overall volumes down 0.5% y/y to 98,914 units. Sales in Japan were also robust with a 32.5% y/y rise in June to 5,632 units and a 26.5% y/y rise in YTD volumes to 24,154 units. Sales in the beleaguered European market place actually performed credibly despite the overall environment, with a 3.4% y/y rise in June to 63,044 units and a 4.2% rise in the YTD to 327,988 units
Outlook and implications
All of the German Big Three premium OEMs posted record sales in the first half of the year as the recent boom in premium car sales that took place in the US and China in particular in the wake of the financial crisis. BMW and Mercedes-Benz posted relatively robust performances in Europe as well during the first half of the year, with 0.1% y/y declines and a combined rise of 4.2% y/y respectively. This is in a European market that is on target to record an overall decline of around 6% y/y for the first half of the year. The big three premium carmakers are still heavily reliant on China and US in order to continue to generate significant overall growth, and any macroeconomic turbulence in these markets will see a rapid and corresponding contraction in their overall sales performance. However, the macroeconomic indicators continue to develop in a reasonably positive fashion, although some of the sales data points towards inherent volatility in the Chinese marker in particular, with Audi's 33.5% y/y spike in Chinese sales in June being an obviously unsustainable number. With global consumers becoming ever more brand- and status-conscious, the likes of Audi, BMW and Mercedes-Benz are in a strong position to take increased market share from more mass-market brands. This is especially the case in the area of compact cars, with Mercedes-Benz taking significant steps to expand their offerings in this area at the moment, while BMW will do likewise in the next few years with its new front-wheel drive B-segment model. Audi is also well placed in this area, with the continuing success of the A1, while the A3 sedan will be rolled out across global markets in the second half of the year.