Vorsprung Durch China: Sales Restrictions in Chinese Cities Will Not Stop Audi Becoming the World’s Best-Selling Premium Brand
There has been a flurry of announcements recently regarding the record sales of Audi, BMW and Mercedes-Benz cars in March and the first quarter of 2014. Better weather in the US, the recovery of car sales in Europe and the later timing of Easter this year are all cited as reasons for the on-going surge in demand for the German premium carmakers’ offerings. Whereas these are all contributory factors, the omission of any reference to the swelling ranks of wealthier consumers around the world who can afford upscale cars, especially in China, is noticeable. After all, it is this ever expanding pool of new consumers in their largest market that will ultimately make Audi the best-selling premium brand in the world. Car sales restrictions in Chinese cities will naturally slow proceedings but Audi’s investments in both its dealer network and local production of compact models is bound to more than compensate.
Two years ago, I discussed the correlation between sales of Audi, BMW and Mercedes brand cars and the development of households with over US$100,000 annual disposable income and the predictions made then still hold up today. First, China became the largest market for the combined sales of Audi, BMW and Mercedes in 2012. In fact, China became the largest single market for Audi in 2011 and for BMW in 2013, with only Mercedes still more dependent on sales in the US and Germany. Second, global sales for the three German premium brands are still on track to easily exceed 5 million units in 2015 – in fact, the 5-million milestone is likely to be reached in 2014 given the recovery in the US and Europe and the continuously rising number of affluent households around the world. Third, despite the model offensives of BMW and Mercedes, Audi’s leadership in China will propel it to become the largest premium carmaker, albeit not before 2015.