German Premium Auto Brands Zip Past Competitors in Europe

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This development isn’t going to make Sergio Marchionne very happy: German premium brands are defying Europe’s economic crisis and picking up sales and market share at the expense of mainstream car brands whose struggles are only growing.

Turns out that, while middle-class European consumers are sweating the Eurozone diffculties and being battered by recessionary gales there, luxury consumers are zipping ahead with substantially more confidence, and buying substantially more vehicles.

As a result of this autobahn-like confidence, brands including all three of the German premium makers — Audi, BMW and Mercedes-Benz — are catching up in sales volume to their mainstream counterparts as the latter brands suffer.

It’s exactly what Fiat CEO Marchionne has been noting as he has been calling for a coordinated approach to trimming production by auto brands in Europe so that general-market brands such as Fiat don’t suffer disproportionately. The Germans have rebuffed him.[more]

And no wonder, looking at the latest sales statistics. In the first seven months of 2012, Audi outsold Fiat and Citroen in Europe, and Audi ranked sixth in European monthly sales, with BMW ranking ninth and Mercedes rounding out the top 10, according to Automotive News Europe.

All three brands have defied the continental slump that has seen car sales drop to their lowest level in 17 years, with Audi sales rising by 28 percent for the year, BMW by 30 percent and Mercedes notching just a 15-percent drop.

The reasons don’t stop with the greater willingness and wherewithal of premium-brand customers compared with their less-fortunate counterparts. Each German brand also has made a concerted invasion of new parts of the market that formerly were the provinces of mainstream brands, including compact cars and small SUVs.

“A large part of that is down to their willingness to explore new niches, finding out what customers want and having the investment cash to give it to them,” Ian Fletcher, a senior analyst at IHS Automotive, told Auto News Europe. Not exactly music to Marchionne’s ears.

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