Surging Luxury Car Demand Vaults Mercedes-Benz Past VW in Japan

Mercedes-Benz is poised to pass Volkswagen to become the top-selling import auto brand in Japan for the first time in 16 years, underscoring the nation’s surprising boom in demand for luxury cars.

Deliveries for Daimler AG’s Mercedes surged 19 percent to 32,680 vehicles this year through June, the Japan Automobile Importers Association said Monday on its website. Sales for Volkswagen AG’s namesake brand, the leading import since 2000, fell 17 percent to 29,666.

Demand for premium cars has been rising in Japan as the benchmark Nikkei 225 Stock Average has almost doubled since the beginning of 2013. Luxury brands are outperforming a slumping broader auto market in Japan, and their success also stands in contrast to a recent slowdown in China, driven by a government crackdown on graft and conspicuous consumption.

“Mercedes is gaining support from customers as they’ve been launching popular, competitive new models one after another,” said Katsuhiko Ikeda, a branch manager at a foreign-car dealership in Ibaraki, Osaka. “They are catching a big wave of the economic boom triggered by Abenomics.”

Mercedes-Benz is growing even as the overall Japanese auto market shrinks. Combined sales of standard vehicles and minicars fell 11 percent during the first half of the year and has declined in 11 of the past 12 months.

Abenomics Boost

The Nikkei 225 last month reached its highest level since December 1996 as policies promoted by Prime Minister Shinzo Abe have weakened the yen and boosted earnings at exporters led by Toyota Motor Corp.

The largesse has filtered down to Michihiro Takeshita, who is fielding a surge in orders for jacuzzis at his business in Kawanishi, north of Osaka.

Takeshita, 51, bought an M-Class SUV in April and an E-Class coupe in June of last year, after business recovered from the financial crisis, which he said had forced him to sell the cars he and his company owned and resort to using bicycles for daily transportation.

Other foreign luxury brands are also having success in Japan. Sales have surged 33 percent for BMW AG’s Mini and 31 percent for Porsche, according to the auto importers association.

The gains are helping offset slowing momentum in China’s auto market, which brands such as Porsche, BMW, and Audi have relied on for about 50 percent of their global profits, estimates Sanford C. Bernstein. Sales of premium cars in the country rose 12 percent in the first four months of 2015, compared with 30 percent growth in 2014, Bernstein said in a July 3 report.

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