Market Insight: Prestige brands key to industry recovery

PREMIUM car brands look set to play a central role in the Australian motor industry’s recovery from the severe downturn caused by the coronavirus pandemic, as evidenced by strong sales results across a broad range of prestige marques in June.

While light-commercial vehicle sales were a driving force behind the June result, pushing up 8.6 per cent to more than 100,000 units, the premium car sector – accounting for about 16,000 units last month – were no less impressive, climbing 31.8 per cent across the various higher-tier passenger car segments (including all sportscars) and SUV categories.

Light, small, medium, large, sports … substantial gains were seen across the premium market in almost every class of vehicle, with double-digit growth spurts in nine out of the 13 segments, 50+ per cent rises for small and light cars and small SUVs, and a 32.5 per cent upswing for the biggest-selling segment, mid-size SUVs. 

Negative results were found in only two niche corners of the market – limousines over $100,000 (down two units) and sportscars over $200,000 (down 66 units).

The June result has helped fuel widespread expectation among the car companies and industry observers that the trend will continue as wealthier Australians, forced to curb their spending on overseas travel as a direct result of the COVID-19 pandemic, shift to luxury vehicle purchases.

Several premium brands are also in the midst of major product renewal programs, which is clearly helping stimulate demand.

The volume-selling prestige marques were the standout performers last month, led by Mercedes-Benz Cars racking up 4437 sales for a 31.4 per cent increase on June last year and eighth position across the entire market, ahead of Nissan, Subaru, Honda and various other mainstream brands. 

This was a return to form for Mercedes after deferring to BMW in April and May, and finding its sales for the year to date down 20 per cent before the end-of-financial-year surge that now sees it only down nine per cent at the halfway mark of the year. 

By comparison, the overall industry is down 20.2 per cent. 

BMW might have reassumed second position in June, but its 3307 sales was an all-time monthly record for the Bavarian brand in Australia, up 32 per cent on the corresponding month last year and taking the marque into positive territory for the year to date by 1.6 per cent.

The company was quick to point out that last month’s result capped off a remarkable second quarter in which BMW posted 26 per cent growth compared to the first quarter of the year, defying the pandemic-related restrictions afflicting the broader market and economy. 

BMW’s Mini brand also recorded a 49.5 per cent increase in sales last month, to 450 units, which places it 9.4 per cent in arrears after six months of trading but, according to local management, sees it well positioned for a quick bounce-back in the second half of the year.

What’s more, BMW Group Australia says 15 of its dealers achieved sales records last month, 37 reported year-on-year growth and 23 outperformed the premium segment trend with double-digit percentage growth. 

The third member of the leading German premium brand triumvirate, Audi, similarly turned in a resurgent sales performance in June with 2027 sales, an 84.6 per cent increase on June last year when it was struggling due to a severe lack of model availability and supply.

The result also now places Audi in a positive position for the year to date, up 0.4 per cent, from which it can now attack with an array of new models arriving in showrooms. 

As GoAuto has reported, a host of other high-end brands last month either shrugged off, or continued to ignore, the coronavirus blues including Lexus (1560, +60.8%), Volvo (1113, +40.0%), Porsche (519, +13.8%), Mercedes Vans (996, +48.0%) and Ram (604, +130.5%).

For the year to date, Lexus has fallen just 1.4 per cent, Volvo has reduced the deficit to 11.9 per cent, and Porsche is poised to return to growth from what is now only a 2.9 per cent backmarker.

Among the premium light-commercial brands, Mercedes-Benz Vans is in the black with a 2.9 per cent increase, while the Ram Trucks pick-up truck conversion operation continues to exert its muscular form on the marketplace with 54.6 per cent growth. 

Jaguar and Land Rover remained in the red last month but the British brands turned in better results, down 6.2 per cent (to 256 units) and 7.5 per cent (to 1127) respectively to leave them with year-to-date downturns of 33 and 42.6 per cent. 

Alfa Romeo continues to struggle, posting only 58 sales last month (-22.7%) for 286 YTD (-36.2%), while the fledgling Genesis brand had its best-ever month with 21 vehicles registered in June – accounting for a third of its total 63 sales for the year. 

The more exotic and super-luxury marques appear to be generally weathering the corona storm and, like the bigger-selling premium brands, will be an important indicator of the market’s recovery during the second half of the year. 

Ferrari is down 9.1 per cent at the halfway mark on 110 units, compared to Lamborghini (54, -42.6%), McLaren (30, -41.2%), Aston Martin (40, -33.3%), Lotus (28, -12.5%), Bentley (91, -13.3%) and Rolls-Royce (18, -30.8%).

The higher-volume Maserati brand also finds itself down 16.3 per cent, on 231 units, but with expectations that the second half of the year will be a considerable improvement on the first.