Mercedes Narrows Gap With BMW, Audi on Compact-Car Demand

Daimler AG (DAI)’s Mercedes-Benz brand beat sales growth at larger German luxury-carmaking competitors Bayerische Motoren Werke AG (BMW) and Audi AG last month as new versions of its A- and B-Class compacts attracted buyers.

Deliveries by Stuttgart-based Mercedes jumped 12 percent from a year earlier to 116,566 cars and sport-utility vehicles in April. Sales at Munich-based BMW’s namesake brand rose 7.5 percent to 130,598 cars and SUVs, while deliveries at Volkswagen AG (VOW)’s Audi division increased 6.6 percent to 133,500, according to data from the manufacturers.

Daimler has a target by the end of this decade of regaining the top spot in luxury car sales that it lost to BMW eight years ago. It’s also working to overtake Ingolstadt-based Audi, which has ranked second in the industry since 2011. Mercedes reworked the A-Class last year into a sportier model to compete with BMW’s 1-Series and Audi’s A3.

“I expect Mercedes to catch up somewhat with BMW and Audi in the second half of the year, mainly due to demand for the compact models and the E-Class” upscale vehicles, Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler, said in a phone interview.

BMW’s four-month deliveries increased at a faster rate than at its two main competitors, with a 7.1 percent jump to 512,000 cars and SUVs versus Audi’s 6.7 percent gain to 503,000 deliveries and 5.6 percent growth to 441,464 at Mercedes.

Adding Models

BMW’s sales momentum “will continue as we add new vehicles throughout the year to our very attractive product line-up, such as the new BMW 3 Series Gran Turismo,” Ian Robertson, the carmaker’s sales chief, said in a statement today. Sales were helped by growth of 2.8 percent in Europe last month and “strong gains” in Asia and the Americas.

The German luxury-car makers, all of which are targeting sales increases this year, have fared better than Europe’s mass-market auto manufacturers as rising demand in China and the U.S. offsets a sixth straight year of industrywide declines in their home region.

“We remain buyers of premium autos and sellers of mass makers” in terms of shares, Erich Hauser, a London-based analyst at Credit Suisse said May 10 in a report to clients. “The companies most likely to see a recovery in demand in the second half of 2013 will once again be premium players.”

BMW’s sales growth last month was propelled by a 15 percent jump in demand for the X1 SUV to 11,837 vehicles and 16 percent gain for the 3-Series to 38,491 cars, driven by the introduction of the revamped wagon version.

New S-Class

Mercedes is looking for a sales boost this year after adding the CLA four-door coupe to its compact car line-up and introducing a fresh version of the E-Class. A new version of the flagship S-Class sedan is scheduled to reach showrooms in the second half of the year.

To meet rising demand for the A- and B-Class models, Mercedes will increase production of the vehicles with 21 extra shifts at its plant in Rastatt, Germany. The compact-car facility in Kecskemet, Hungary, added Saturday production last month, and Mercedes will build more SUVs at its plant in Tuscaloosa, Alabama, Daimler has said.

To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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