IHS Global Insight Perspective | |
Significance | Despite some indications that the market conditions are set to ease for premium carmakers in the second half of 2009, Mercedes-Benz Cars and the BMW Group recorded 11% and 12.6% declines in sales in July. |
Implications | BMW is currently struggling with model cycle factors as well as the widespread downturn in the mature markets on which these two companies are widely dependent, such as Western Europe and North America. Daimler has the same market issues but has been bolstered by the recent successful launch of the new Mercedes-Benz E-Class. |
Outlook | Both carmakers are expecting a mild uplift in sales in the final months of 2009, something that should be facilitated by the low base comparison recorded in the final months of 2008, while new model launches should act as a catalyst for fresh sales impetus. However, there is little doubt that both companies will see significant y/y declines in comparison with 2008 volumes. |
Mercedes-Benz Cars and the BMW Group posted combined sales declines of 11% and 12% year-on-year (y/y) respectively in July as sales of premium passenger cars were once more negatively affected by the continuing weak global economic conditions. In July Mercedes-Benz cars managed combined global sales of 93,900 units, (July 2008: 105,100 units), which represented an improvement in outright volume terms on sales numbers recorded in the early months of 2009. In terms of the brand by brand breakdown within the group, Mercedes-Benz cars delivered 83,500 units in July, a 10% y/y decline on the 92,700 units delivered in July 2008. This was helped by stabilisation in certain key markets such as Germany and other European markets, while the brand also enjoyed positive sales growth in China, where Mercedes-Benz brand cars posted a record sales month, with 5,000 units sold during the month which was a 35% y/y rise on the figure recorded in July 2008. The brand's year-to-date (YTD) sales increase in China stands at 33,200 units which represents a 40% y/y increase for the first seven month of the year, with Mercedes-Benz making the claim that it is currently the fastest growing premium passenger car brand in China. In addition, the initial roll-out of the new E-Class has been a success with more than 40,000 units being delivered to customers since its market launch at the beginning of the second quarter (see Germany: 12 January 2009: NAIAS 2009: Mercedes-Benz Targets Engineering Savings; Claims High Fuel Efficiency for New E-Class). Dr Klaus Maier, Executive Vice President Sales and Marketing said, "The full availability of the E-Class sedan and coupe and the introduction of the station wagon and new-generation S-Class will help to further stabilize sales in the next few months." Mercedes–Benz did not get separate monthly sales data on Smart or Maybach sales.
For its part the BMW Group fared slightly less well in terms of sales decline in July, although it posted outright higher sales volumes of 109,923 units in comparison to the Mercedes-Benz car group (July 2008: 125,792 units). The higher rate of decline of 12.6% y/y in comparison to Mercedes-Benz was despite a strong performance from the Mini brand, which achieved its first y/y outright increase in sales volumes since September 2008, managing a 0.3% y/y rise in volumes 19,281 (July 2008: 19,224 units). This performance was actually the responsibility of the new convertible version of the second generation R56 model which has been on sales since March. The model's sales rose by 48.5% y/y in July to 3,695 units. It has taken the BMW Group a long time to get the convertible R56 Mini to market as the standard model was launched in 2007 but the company is now reaping the benefits. BMW brand sales recorded a 14.9 y/y decline to 90,597 units. Despite this overall decline some models did posts strong gains with the new F1-segment 7-Series making a 57.9% y/y gain in volume to 4,631 units, while the second generation Z4 saw its sales rise 123.4% y/y to 3,293 units, with the new model experiencing strong initial demand. Commenting on the results, BMW's board member responsible for sales and marketing, Ian Robertson said, "Our sales performance again improved slightly in July – and MINI was even back on its growth path. Over the course of the next months we will see BMW Group sales continue their gradual upward trend – not least as a result of several new models. I am confident we will continue to expand our market position in the premium segment for 2009 as a whole and be able to maintain our position as leading premium manufacturer." The BMW Group also reported that its combined YTD sales for the first seven months of the year fell by 18.8% y/y to 604,190 units.
Outlook and Implications
While there is no doubt that in outright terms the sales results for the world's biggest two premium carmakers remained disappointing, there was some evidence that the beginning of a recovery may be starting to take shape. Both companies announced their second-quarter financial results last week, although they differed slightly in their perception of how the market would develop in the short-term. BMW Chairman Norbert Reithofer said, "Despite some tentative positive signals, a lasting and wide-ranging recovery is not yet in sight." In contrast Daimler Chairman Dieter Zetsche speaking in June said, "From today's perspective, not only will we not experience any more negative surprises in terms of the whole year, rather we could even have the chance to develop positively" (see Germany: 23 June 2009: Daimler CEO Says 2009 Targets Will Be Met; Forecasts Gradual Market Recovery). However, he too cautioned against any expectation of a strong short–term recovery in the market and said that he expected any recovery to start only at the beginning of next year. While Daimler is enjoying the benefits of the initial rush of orders for its new E-Class, BMW's mainstream model range is starting to look somewhat tired, with all three of its mainstream offerings, the 1-Series, 3-Series and the 5-Series in the second half of their model cycles. The new 5-Series is due to debut at the Frankfurt Motor Show next month, and will be rolled out across the global market in the early months of 2010. This should provide a similar sales stimulus for BMW as the E-Class has provided for Mercedes-Benz. BMW's model launch programme has been very active this year, but the new Z4 and the forthcoming 5-Series GT and X1 are more niche models that will only have a limited effect on BMW's outright sales volumes. For the full year, IHS Global Insight forecasts sales for the Mercedes-Benz Car Group and the BMW Group of 999,000 and 1,058,000 units respectively, in comparison to 2008's sales of 1,209,000 and 1,341,000 units in 2008.