Mercedes-Benz outsells BMW and Audi in August, overtaking latter in YTD

The Mercedes-Benz brand sales outsold both BMW and the Audi brands in August as it continued its recent renaissance against its two closest competitors, with sales rising by 17.6% year on year (y/y) to 139,802 units, according to company press releases from each brand detailing their monthly sales tallies. This compared to the usual premium brand leader BMW, which increased 7.6% to 135,735 units during August and Audi, which saw the slowest rise of all the big three car premium brands with a 2.7% y/y rise to 128,650 units. While Mercedes-Benz cars bucked the trend in China during the month by posting a hugely accelerated rise of 53.1% y/y during the month to 32,763 units (see Germany: 7 September 2015: Mercedes-Benz passenger car brand sales increase 18% y/y in August). BMW did not give a breakdown of its August sales in China in its monthly sales release, although brand sales had fallen by 7.4% y/y in July. The company did state in its sales release that Group year-to-date (YTD) sales in China were up marginally by 0.9% to 301,529 for the first two-thirds of the year. Meanwhile Audi, which has long been the premium brand market leader in China, declined 4.1% y/y to 45,196 units, still maintaining its leading position in China, while its YTD stood at 361,316 units, a decline of 0.8% y/y.

While Mercedes-Benz's bullish August in China left the way open to overtake its peers in August, the significant difference in performance has had a profound effect of the three brand's YTD tallies for the first eight months of the year. The BMW brand has retained the YTD sales lead with a 5.5% y/y rise to 1,215,298 units. However, Mercedes-Benz closed the gap appreciably with a 15.1% y/y rise to 1,187,980 units and is actually now clearly in front of Audi for the YTD, with the latter posting sales of 1,177,100 units, which equated to the smallest YTD rise of all the big-three premiums at 3.4% y/y for the year. As well as China, Mercedes-Benz's strong growth in the US helped it outpace Audi and close the gap to BMW.

Mercedes-Benz enjoyed a strong first eight months of the year in its European sales region with an 11.2% y/y increase in the first eight months of the year to 507,772 units. This helped to close the gap on Audi, whose sales in the region rose by 3.1% to 533,050 units. BMW only gave a breakdown of its combined group sales in its press release in Europe, with the figure rising by 10.5% y/y to 622,625 units. However, this figure will have been skewed by strong Mini sales as a result of the launch of the third-generation model last year. In the US, Mercedes-Benz brand sales rose by 4.8% y/y in August to 28,743 units in comparison to a 9.9% y/y increase for Audi to 18,794 units, while BMW brand sales in the country rose 2.0% y/y to 27,755 units.

Outlook and implications

Mercedes-Benz's management team will be delighted by the progress its main passenger car brand has made against its two closest rivals in August and in the YTD. Its performance in China was key to its outselling BMW and Audi in August and has helped it to overtake Audi for the first time in YTD sales. There are a number of reasons why Mercedes-Benz has been able to outperform its rivals in China, as board member for sales and marketing Ola Källenius explained earlier in the week in an interview with Automotive News Europe. He said, "We've adjusted our product lineup to better match the tastes of our Chinese customers. By offering a long-wheelbase version of the C class we sell two or even three times the volume we sold with the old C class. We are dominating the upper-premium segment with the S class and its Maybach variant. In March we added local production of the GLA compact SUV, which is giving us an additional boost." Local production of the company's compact car range has certainly helped with the A-Class also selling well, and the revised version will go on sale in Europe this month. In China Mercedes-Benz has also completely reorganised its sales and distribution network, opening 100 new dealerships in tier 2, tier 3 and tier 4 cities, while it will also add a further dealerships in China this year despite the overall market slowdown. While Mercedes-Benz has been improving its model line-up in China, Audi's and BMW's more mature sales operations and model line-ups i have been more susceptible to the slowdown as a result of higher sales base levels. Mercedes-Benz has also made up ground in Europe and maintained its market-leading position in the US in the YTD, although Audi has grown at a faster rate, albeit at a much lower sales base than its rivals in the US. There are model cycle factors involved in Mercedes-Benz's current success, with the compact car range and the C-Class still in the earlier stages of their model cycles, although there is no doubt the company has improved its core models greatly with the current iterations, especially in the case of the A-Class and C-Class. For the full year IHS Automotive forecasts that BMW will retain the top spot in terms of premium passenger car brand sales with volumes of 1.91 million units, while the race for second will be very close with Audi just staving off Mercedes-Benz with 1.80 million units to 1.79 million units.