China is the answer for the three luxury automakers in Germany. The Asian country's luxe vehicle sales is expected to grow drastically over the next five years.
Avid WorldCarFans readers will not be surprised to hear that Audi, BMW and Mercedes-Benz have been fiercely battling to increase sales and market share in China as a way of compensating for flagging sales in more traditional markets. Despite a year-to-year reduction in sales in Germany for the month of July, both Mercedes and Audi saw significant increases in China.
While Audi sales increased in China by 53 percent, Mercedes sales practically tripled. BMW, which had a slim increase in German sales of four percent, delivered 82 percent more cars to customers in China versus a year earlier.
One explanation for the increases comes from the J.D. Power & Associates research firm. A recent report from the group says that luxury vehicle sales will advance in China twice as fast as the industry's average. This could translate to 1.1 million units by 2015.
"Limited competition, very strong growth and a willingness to spend money," said automotive research executive Michael Dunne in an interview with the Automotive News. "The combination is just explosive," he continued, noting that newly-wealthy Chinese people are "declaring their success to their friends, family and colleagues with what kind of car they are driving."
The result: Significant profit increases amongst the German automakers, despite very little growth in the European markets.