The battle between the two largest luxury car companies based on sales goes back and forth most months. In June, BMW was the leader, edging out Mercedes by a small margin.
BMW sales reached 32,176, up 6.5%. Mercedes sales were up 6.2% to 30,486. For the first half of the year, BMW sales rose 7.1% to 168,623. Mercedes sales for the same period were 178,500, a 9.1% improvement. While Audi is a distant third among the three German manufacturers, it continued to grow the fastest as June sales hit 18,262, up 8.2%. For the year so far, Audi’s sales were higher by 11% to 93,615.
Mercedes management should be worried about the engine of its growth, which includes its least expensive cars. Sales of its least expensive model, the CLA, were up 44.2% to 2,391. The base price of the model is $31,500. Sales of the C-Class rose 48.2% to 8,316. The base price of the C-Class line is $38,400. The Mercedes strategy for selling cars at the low price point is that it will entice younger drivers, who will stay with the brand for decades, upgrading to more expensive models along the way.
BMW has adopted a similar plan. Sales of the 1/2 Series rose 56.9% to 1,067. The line has a base price of $32,100. Sales of the 4 Series were up 69.4% to 6,625. The base price of the models in this line is $40,300. The only relatively expensive car in the BMW line that did well in June was sport utility vehicle (SUV) model X5, which had sales of 7,508, higher by 89%. The X5 has a base price of $53,900, which is still well below BMW’s most expensive models.
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The idea of offering low-priced, entry models as a means of potentially stepping up buyers is not new in the car industry. Whether it has been successful is hard to measure. What is easier to figure is that, if BMW or Mercedes buyers turn to other brands as these drivers become older and more affluent, the brands will have wasted money on one of their primary means to bring in new customers and make those customers more profitable over time.
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