Premium Sales Show No Signs of Slowing As BMW and Audi Post Record Sales Totals in March
BMW and Audi have enjoyed record sales in March and the first quarter on the back off strong growth in China and the US.
IHS Global Insight Perspective
The volume premium passenger carmakers are continuing to benefit from strong global demand as both BMW and Audi posted record individual monthly sales totals during March with sales of 185,728 units and 143,500 units respectively.
The slowdown in the European market appears to have had little effect on the premium carmakers in March and the first quarter as strong demand from the US and China, expanding model ranges and new model launches continue to fuel sales growth.
It is unlikely that both OEMs will be able to keep up this rate of sale growth throughout the full year, although BMW will continue to benefit in particular as the new F30 3-Series model range is rolled out. Nevertheless, as global consumers—especially those in emerging markets—become more status- and brand-conscious, the volume premium carmakers such as BMW, Audi and Mercedes-Benz look to be in an increasingly strong position.
The BMW Group and Audi posted record individual monthly sales totals in March as they continued to benefit from the global surge in demand for premium cars, with the US and Chinese markets in particular continuing to help generate accelerated sales growth. According to a company press release the BMW Group posted combined sales volumes of 185,728 units in March, which was more than any other single month in the company's history. This figure absolutely shattered the previous record monthly sales high of 165,855 units and was also 12% higher than the equivalent month last year which saw sales of 165,846 units. The BMW Group also achieved a new record sales total for the first quarter, with sales rising by 11.2% year-on-year (y/y), with a figure of 425,528 units. Commenting on the March and first-quarter sales results BMW's board member for sales and marketing Ian Robertson said, "These outstanding results are due to our attractive, young model range and our strategy of healthy, balanced growth across the globe. We aim to continue the momentum with additional new models this year, such as the luxurious BMW 6 Series Gran Coupé and a model revision of the flagship BMW 7 Series. The company plans to grow faster than the market as a whole in 2012 and expects to achieve new sales volume records for its BMW, MINI and Rolls-Royce brands." Sales of BMW-brand models rose by 13.4% y/y to 153,004 units in March, and rose by 11% in the first quarter to 356,548 units. The first full month of the new F3 3-Series being on sale saw the model record an accelerated rise in sales volumes of 19.2% to 29,004 units. The 1-Series five-door model (still the only variant of the new 1-Series on sale) saw its sales rise by 40.8% y/y to 18,598 units. The X3 was another standout performer with its sales rising by 59.4% y/y to 14,847 units. Sales of the BMW 6-Series increased nearly six-fold compared to the same month last year with a total of 2,247 vehicles delivered to customers as a result of the new model launch. The current BMW 7-Series reached a new milestone in March with a total of over 200,000 vehicles sold since its introduction at the end of 2008. This makes it the best performing BMW 7-Series ever, gaining around 20% higher sales than its predecessors in the same period of time. With 6,648 vehicles delivered in March, the flagship model achieved a 14.5% increase in sales. Mini-brand sales rose by 5.6% y/y to 32,461 units during March.
Country-by-country, the BMW Group posted increases in its three biggest markets, Germany, the US and China. Germany recorded the mildest increase, as would be expected given the sluggish market conditions in Europe, in which Germany is actually one of the healthiest markets in terms of at least maintaining last year's sales volumes. BMW outperformed the overall first-quarter market rise in Germany of 0.8%, with a Group sales increase of 2.0% y/y to 66,222 units. However, China and the US posted record first-quarter sales figures with rises of 16.6% to 75,729 units and 36.8% y/y to 80,014 units respectively.
During the same period Audi also posted a new record high sales total as the company continued to enjoy accelerated sales gains for its model range in the US and China. The company enjoyed a record first quarter total with sales rising 10.8% y/y to 346,100 units, according to a company press release. This overall figure was boosted in addition by a record individual sales month during March, with sales rising by 14.1% y/y to 143,500 units. Audi's board member for marketing and sales Peter Schwarzenbauer highlighted that there is cause for significant optimism as the year rolls on. He said. "Our new A3 will be rolled out from the second half of this year, and we have just introduced the new-generation A6L in China." The luxury sedan's long-wheelbase version leads its segment in China. Indeed China was the big overall growth driver in March and the first quarter. Sales rose by 40.5% y/y in the first three months of the year to 90,063 units as Audi maintained its premium-market-leading position in the world's biggest car market. In the US, where Audi has traditionally lagged behind its rivals BMW and Mercedes-Benz the company's investment in its sales, marketing and distribution operations are starting to pay off. Sales rose by 18% to 11,585 units in March and by 16.1% y/y to 29,470 units in the first quarter. For the first quarter, Audi actually posted a very mild dip in sales in the tough European market environment with sales falling by 0.1% y/y to 186,350 units. This was bolstered by a strong March which saw sales rise by 7.0% y/y to 85,550 units.
Outlook and Implications
These figures show that the three leading volume premium OEMs—BMW, Mercedes-Benz and Audi—are currently outstripping the global OEMs in terms of sales growth, and as a result of the comparatively high unit cost of their models, in the area of profitability as well. As we can see by the numbers above, this current period of success for the Big Three volume premium carmakers is being driven by the continuing accelerated growth of demand in the Chinese market. The recent regulation changes to the purchasing criteria for government agencies for cars for officials appear to have had little effect on the sales performance of Audi and BMW in China, with a 1,800-cc capacity limit supposedly being introduced on government car purchases. Both companies are well prepared in any case; long-wheel-base (LWB) versions of the new F30 3-Series in China will be launched later this year, while Audi already has a LWB version of the A4 for the Chinese market. However, the Big Three will benefit as the year goes on from the launch of key new medium segment and compact models which will help fuel their sales, especially in the currently tough European market. BMW will roll out more variants of the 1-Series while the new F30 3-Series has made a very strong start in the market. Audi has the new A3 and Mercedes-Benz has enjoyed the successful launch of the B-Class, with the new A-Class following in September. Audi managed to stay ahead of Mercedes-Benz in March, after the latter sold 131,334 cars in the same period. Audi overtook Mercedes as the second-largest premium brand by sales volume last year and has surpassed BMW in terms of profitability thanks to the economies of scale from being part of the VW Group.
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