Audi Joins Mercedes in Narrowing BMW Luxury-Car Sales GapElisabeth Behrmann
Audi AG’s A3 compact sedan and Mercedes-Benz’s top-of-the-line S-Class model helped the German companies narrow the sales gap with global luxury-car leader Bayerische Motoren Werke AG in the first half of 2014.
Six-month auto sales by BMW’s namesake brand exceeded Audi’s deliveries by 16,997 vehicles compared with a difference of 23,760 a year earlier, according to figures released by the manufacturers this week. BMW’s lead against Mercedes shrank 6.3 percent to 102,827 cars. All three automakers posted record deliveries for the period.
Volkswagen AG’s Audi has been renewing its A3 lineup since early 2013, and No. 3 Mercedes has been offering a wider range of compacts in addition to the new S-Class version brought out a year ago. Both are pushing to overtake Munich-based BMW in premium-auto sales by the end of the decade. BMW has responded with the 2-Series and 4-Series coupes and X4 sport-utility vehicle and is rolling out the plug-in i8, its first sports car in more than three decades.
“The gap should continue to narrow while BMW should see some support of its own, like the 2-Series and the X4 as we go into the end of the year,” Stuart Pearson, a London-based analyst at Exane BNP Paribas, said by phone. “BMW will stay in the lead for the foreseeable future.”
BMW dropped as much as 1 percent to 92.95 euros and was trading down 0.8 percent as of 11 a.m. in Frankfurt. Volkswagen fell 1.6 percent to 185.75 euros.
Audi plans to introduce 17 new or revamped vehicles in 2014, including a remake of the TT sports car, to expand its lineup by 22 percent to 60 models by 2020. It’s targeting at least 2 million annual deliveries by then. Mercedes is working to roll out 30 models by the end of the decade, including a dozen all-new vehicles.
BMW’s first-half sales rose 10 percent to 886,347 vehicles, including a 7.3 percent gain in June, the company said today. Deliveries rose 36 percent for the X5 SUV and 18 percent for the coupe-like X6. Including the Mini small-car brand and Rolls-Royce ultra-luxury nameplate, group sales increased 6.9 percent to 1.02 million autos.
“The figures confirm we’re on the right track to achieve our target of delivering more than 2 million vehicles in 2014,” Ian Robertson, head of sales and marketing for BMW, said in a statement. “We aim to continue our sales growth in the second half.”
Audi’s six-month deliveries increased 11 percent to 869,350 cars, the Ingolstadt-based company said yesterday. The U.S., China and Spain propelled growth last month. Sales of the A3 model range surged 49 percent in the first half, while Q3 SUV deliveries jumped 37 percent and the Q7 SUV won 21 percent more buyers. The brand’s sales gap with BMW narrowed by 28 percent.
Mercedes, the main brand of Stuttgart-based Daimler AG, delivered 783,520 autos in the first half, a 13 percent gain. Demand in June increased 8 percent. Growth was held back by a drop in sales of the best-selling C-Class as customers in China and the U.S. await the arrival of a new version in September following the model’s European introduction in March.
“Once Mercedes’s C-Class launches everywhere, it will be pitted against BMW’s 3-Series, which is a key model for the company,” Daniel Schwarz, an analyst at Commerzbank AG in Frankfurt, said by phone. “That’s why I think BMW pricing for the second half of the year will probably be weaker than during the first half.”
S-Class deliveries more than doubled in the six-month period, Daimler said. The compact range, which includes the A-Class hatchback and van-like B-Class as well as the new CLA four-door coupe and GLA SUV, won 24 percent more buyers.
Demand for premium models in China and the U.S., the world’s two largest auto markets, is contributing to growth at the three German carmakers, which are all targeting record deliveries for 2014 as they vie for the global lead.
The competition is driving average price discounts of about 20 percent which, as well as sapping earnings, are at odds with the image of a luxury brand, Arndt Ellinghorst, an analyst at ISI Group in London, said in a report last month.
“Pricing can improve if management boards stop chasing volume,” Ellinghorst said. “This could drive margins materially higher.”