Mercedes vs BMW: Who’s shaking the market?

Mercedes-Benz proposes a less disruptive approach than BMW. Time will tell who was right between the two premium brands.

By: Juan Felipe Munoz

Adapted by: Brian Potter

Jun 9, 2022 at 10:20am ET

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If there is a healthy rivalry in the history of the automotive industry, it's the one between Mercedes-Benz and BMW. You can’t talk about one without mentioning the other one. They are rivals like Renault is to Peugeot in France, Ferrari to Lamborghini in Italy, Ford to GM in the USA, or Toyota to Honda in Japan.

Their commitment to overtake its rival has allowed the industry to see big progress in terms of performance, safety, and design. Mercedes is probably the best thing for BMW, and the other way around. Without the strong competition from each other, they would have been in a more difficult situation and would not be the leaders in the premium car market. Competition is always a good thing.

Today, they are the most popular premium car brands in the world. I could say that everybody knows or has heard about Mercedes and BMW. They are the goal for many drivers. Together, they sold almost more than 4.3 million vehicles in 2021, counting for 40% of the global sales of premium and luxury vehicles.

BMW grows faster

Although they have been traditionally very similar when it's about technology and innovation, there are new changes that started to emerge some months ago. For example, last year, BMW outsold Mercedes and became the world’s favourite premium car brand, following a 9% increase compared to 2020 volumes. In contrast, Mercedes-Benz Cars (excluding Smart and vans), recorded a decrease of 5%.

BMW has benefited from an increasing demand at its most popular models, whereas the brand from Stuttgart suffered from an aged C-Class and E-Class. BMW increased its volume sales in China, Europe, USA and Japan-Korea, while Mercedes recorded decreases in those four markets. It is remarkable the difference in the sales variation in China-region and USA-Canada, of +8% vs -3%, and +21% vs -1%, respectively.

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Disruptive vs conservative

Last year’s results are partly explained by different strategies taken by both companies. Over the last 10 years, Mercedes has focused all its efforts on reducing the average age of its customer base. The introduction of the A-Class, CLA, CLS, and the SUV lineup with the coupe-derived versions is the result of this change. And they have paid off, as today Mercedes is known not only for its luxury and elegant saloons, but also for its sporty and performance vehicles.

BMW never had that “problem”. In contrast to the historical positioning of its rival, they have been more associated to performance premium cars. So very few changed in terms of strategy over the last years. Until now.

Based on the latest presentations, it seems that BMW is now taking the disruptive approach while Mercedes is taking to the conservative path. Clear examples of this emerging difference: the BMW iX, the second generation of the 4-Series, and the recently presented all-new BMW 7-Series. They were all like atomic bombs in the social media. Everybody was talking about them, for good or for bad. On the other hand, we’ve seen how the latest Mercedes follow the same design feeling with more evolution than revolution.

We still need to see if the change of their approach will pay off and what will happen to their global sales gap. It can be a key differentiator in the future, or just another cycle for each one of them. Time will tell.