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News - Market Insight - Market Insight 2011

Audi launches into 2011 with a win over rivals

Sales winner: Audi's Q5 luxury compact-SUV has helped the German marque make a record-breaking start to 2011

German luxo market a race of three as Audi beats Benz and BMW

15 Mar 2011

AFTER keeping its powder dry in December, luxury car importer Audi Australia has vorsprung into 2011 with company-record volumes surpassing those of its main rivals, Mercedes-Benz and BMW, for the first time.

Audi registrations in December dipped to just 429 units, less than half of its average monthly sales in 2010, due, the German-based company says, to stock shortages and the vagaries of ship arrivals and market forces.

This puny monthly tally was dwarfed by Mercedes’ massive December sales of 2119 cars and SUVs (excluding commercial vehicles) as the three-pointed star brand pushed all the way to the line to ensure 2010 luxury market leadership over long-time rival BMW.

When the dust settled, Benz had registered 18,464 cars and SUVs for the 12 months, finishing fewer than 500 units ahead of BMW’s 17,993.

Audi was a distant third on 12,900 units for the year, although that represented a company record, up 14.1 per cent.

December was not only Mercedes Cars Australia’s biggest month ever but the biggest result for any luxury car importer in Australian history.

Just one month later, the contrast in sales performance could not have been more marked, with Mercedes’ registrations easing all the way down to 844 units in January while Audi’s grew by more than 1000 units to a company record monthly tally of 1477.

128 center imageFrom top: BMW X3, BMW 3-series sedan, Audi A5 Sportback, Mercedes-Benz E-class sedan, Mercedes-Benz B-class.

If Audi was deliberately aiming for a quick start to 2011, it got it. After two months of the year, it has registered 2936 vehicles – up 15.3 per cent on the same period last year – while BMW shifted 2218 units (down 21.8 per cent) and Mercedes registered 1998 cars and SUVs (down 17.5 per cent).

If Audi can maintain its current sales rate, it will sell about 18,000 vehicles in 2011, putting it well ahead of its ‘Route 15’ plan target – to sell 15,000 vehicles in Australia by 2015 as part of its bid to become the number one German luxury car-maker in the world, including Australia.

It is early days, and the next few months could show if we have truly seen a changing of the guard in German marque leadership or a mere fluctuation of sales due to available stock, new-model launches, sales pushes and the other usual factors.

BMW has been hamstrung by a lack of X3 SUV stock as it warms up for a full model change this month. So far this year, sales of this mid-size luxury soft-roader are down 90 per cent, from 229 last Jan-Feb to just 22 in the first two months of 2011, but that should rapidly reverse now that the new model is rolling into the country, provided BMW Australia can get its hands on enough cars to meet demand.

Offsetting that is a decline in sales of the larger X5 and the related X6, sales of which are down 25.3 and 47.9 per cent respectively.

Of more concern are sales of BMW’s perennial best seller, the 3 Series sedan and wagon, which have slumped 39.2 per cent so far this year. BMW says some of these sales might have migrated to the X1 SUV, which is now the company’s third-best seller.

BMW is still about a year away from a fresh 3 Series, so the current model will have to soldier on against Mercedes’ C-class that is due to get a mid-life makeover in the middle of this year. So far this year, C-class sales are down 16.3 per cent, but its 652 sales puts it well ahead of the BMW 3 Series’ 476 units.

The Benz problem remains a lack of a compact SUV, with BMW’s X1 making plenty of sales hay, as is Audi’s Q5 (and a Q3 is on the way for next year).

Like BMW, Audi’s current problem child is its small luxury sedan, with sales of the A4 down 20 per cent over the first two months of 2011. Again, Q5’s sales gain is A4’s loss.

As well, Audi’s well-received A5 Sportback might be stealing some A4 sales at the upper end, with sales of the hatchback up 56.7 per cent year on year.

At the cheaper end, Audi’s all-new A1 has provided 254 incremental sales this year, while BMW’s 1 Series has slipped 34.9 per cent while awaiting a refresh later this year.

At Mercedes, the axing of the A-class has been the B-class’s gain, with volumes of the latter up 56.5 per cent in the past two months, to a handy 302 units for the year.

In the middle ground, a major battle is looming in the mid-sized executive express market. BMW’s fresh 5 Series is hunting along nicely, up 121 per cent compared with the same period last year, and Audi’s rival A6 is up 50.8 per cent.

However, Mercedes E-class sedan and wagon is struggling, down 48 per cent. This puts the mid-sized BMW and Mercedes machines almost level on year-to-date sales, with the 5 Series a nose in front on 232 sales against 227 for the E-class.

Alarmingly for Benz, apart from the B-class, the only Mercedes models in positive territory so far this year are newly released niche players, the R-class luxury people-mover, flagship S-class limo and GL-class all-wheel drive.

At BMW, it is a similar story, with only the 5 Series and niche 5 Series Gran Turismo in positive territory.

By contrast, Audi has seven of its 12 models showing black ink on the sales charts, including volume contributors such as the Q7, which has almost doubled its number this year, up 94.1 per cent to 398 units.

How much of the market gyrations of recent months are a result of companies forcing the market, we will never know.

However, if monthly volumes for the past 14 months are averaged to iron out the creases, Mercedes-Benz is in front on 1474 vehicles per month to BMW’s 1443 and Audi’s 1131.

What is clear, however, is that traditional market leaders Mercedes and BMW have a real rival for market leadership, sooner than most pundits expected.

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