German premium brands count on EVs
As German premium brands brace themselves for the potentially treacherous transition to autonomous, electric and shared vehicles, Audi, BMW and Mercedes-Benz should enjoy the advantage of starting from a position of strength. Buoyant Chinese demand and a continued push into trendy niches with lifestyle-oriented products such as the upcoming BMW X2 crossover should help propel the trio to further growth in 2018.
Mercedes and BMW each set new all-time highs for worldwide sales for the seventh straight year while Audi had record sales for the eighth consecutive year. There’s little evidence to suggest these streaks are at risk, at least from a global perspective. This success should help the three automakers to navigate a more difficult landscape in Europe, where diesel demand is declining, which makes it harder for them to reach tougher emissions goals that start to take full effect in 2021. The trio must also cope with the continued decline in the lucrative UK market, which is set to retreat further because of Britain’s pending exit from the EU.
“Premium brands are still a structural growth story since Mercedes, Audi and BMW have been able to considerably expand their product portfolios into volume segments, where they enjoy an image boost compared with mainstream competitors,” said Stefan Bratzel, head of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany.