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BMW leads Mercedes for US luxury car market crown

07 november 2014, 10:40
0
German carmaker BMW. ©AFP
German carmaker BMW. ©AFP

 With the economy rebounding and gasoline prices sinking, German automakers BMW, Mercedes-Benz and Audi are battling furiously to dominate the lucrative US luxury car market, AFP reports.

Just-released sales numbers for October show that BMW has wrested first place from Mercedes, the ruler of the high-end segment in 2013.

But the race remains close enough that both will likely battle at full throttle through the last two months of the year for the 2014 crown.

"One of the noteworthy facts in the October US new vehicle sales results is that BMW now leads its arch-rival Mercedes-Benz by just 5,389 unit sales through the first 10 months of this year," said IHS Automotive analyst Tom Libby.

"With such a small gap in sales through 10 months, the two makes will most likely use marketing tools extensively through the end of the year, including numerous types of incentives, to gain an edge."

Sales of Mercedes slowed in October compared with a year earlier, but in the 10 months from January were up 6.8 percent from a year earlier at 261,804 vehicles, according to Stephen Cannon, chief executive of Mercedes-Benz USA.

“We're building momentum month after month, working toward a record year despite the challenges posed by spot shortages in some of our most popular model lines," said Cannon.

BMW though had a strong October gain, taking its 10-month sales to 267,193 units, 12 percent more than 2013.

“The momentum is still with us as shown by back-to-back monthly records for BMW in October and September,” said Ludwig Willisch, president of BMW of North America.

He said the company's 2 and 4 Series are leading the charge. "But I am also very pleased to see our Born Electric BMW i3 doing so well, averaging a thousand per month in sales after only four months on the market."

While the Teutonic titans have a solid lead in the world's largest luxury car market, competitors like Audi and Japan's Lexus are snapping at their heels.

Lexus, Toyota's luxury brand, particularly popular on the US West Coast, has registered a 14.3 percent gain to 244,000 vehicles so far this year.

Volkswagen's Audi meanwhile said sales have risen 14.7 percent so far this year to 146,133 cars.

“We can confidently predict that 2014 will end as the fifth-consecutive record year for Audi sales in the US," said Mark Del Rosso, Audi of America's chief operating officer.

Porsche, the Volkswagen Group's other luxury brand, also reported strong US sales: 39,033 vehicles in the first 10 months, an increase of 11.2 percent over the same period in 2013.

John Krafcik, the president of TrueCar Inc., an Internet-based car-buying service, noted the strong showing by Porsche and Audi also shift the complexion of the Volkswagen Group's performance in the hot US market.

While the Volkswagen brand has faltered over the past couple of years, Audi and Porsche have picked up substantial amounts of revenue from American customers.

    US automakers trailing 

 Left behind in the battle, and now scrambling with a new strategy, is General Motors's Cadillac, not long ago the king of luxury in the United States.

Cadillac sales dropped by four percent during the first 10 months to put it well behind the pair of Volkswagen brands. And in its wake is Ford's luxury mark Lincoln.

In September GM embarked on a new strategy for Cadillac, splitting it off into a separate business unit with its own headquarters in New York rather than Detroit, in hopes of improving its image and wresting back buyers from the more popular German cars.

But for all of them, the luxury market in the United States is highly profitable and looks to remain so in the future.

"With gas prices at a three-year low and with consumer confidence at a seven-year high, this trend should continue," said Alec Gutierrez, senior analyst for Kelley Blue Book.


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