BMW, Mercedes-Benz and Audi each badly wants to be the brand at the top of the global automotive-luxury mountain, and each has a strategy for attaining or retaining that pinnacle over the next few years.
But the main action won't be their old stomping grounds in Europe; the sales picture there, even for premium brands, just keeps getting worse as the eurozone slips further into recession.
Instead, it'll be their performances in China and the United States that largely determine which of the three German-bred brands might gain enough traction to put the other two firmly in its rear-view mirror by the end of the decade.
BMW remains the leader for now, with Audi and Mercedes-Benz bunched closely behind it, each with around 1.5 million global sales last year. In its continuing close race with Mercedes-Benz for U.S. luxury-market sales leadership, in March BMW cut into its rival's short-term lead with a 13 percent year-over-year sales increase compared with half that percentage increase for Mercedes. Of course, each is eyeing Lexus as well, which wants to return to its former No. 1 spot in U.S. luxury sales.
The company plans to vigorously defend its narrow leadership in the segment, CEO Norbert Reithofer said earlier this month, counting on continued growth in China as well. Daimler CEO Dieter Zetsche is currently trying to find ways for Mercedes-Benz to not fall further behind the other two, planning to roll out 13 additional models in the next eight years. "We are convinced we have the strongest brand," Zetsche told Bloomberg last month. "We are technologically in the leadership position."
And Audi, while No. 1 in sales volume in Europe and China, has the tall task of trying to catch the other two in sales volume in the U.S., where BMW and Mercedes are way ahead. "Audi in the States has immense momentum," Max Warburton, an analyst at Sanford C. Bernstein, toldAutomotive News. "They are behind in some states but are flying in the Northeast, the Snow Belt and California."
At the same time, Audi CEO Rupert Stadler continually says that Audi isn't just after global sales-volume leadership per se but a more vaguely defined overall leadership of the segment. "To be No. 1 requires a lot more than just selling more cars than your competitors," he told Automotive News Europe. "It also means offering better quality, outstanding service and more. These so-called soft factors have the same importance to us as volume... If we wanted to buy market share [via pricing and incentives], we could do it tomorrow. That's easy, but that's not our strategy."
The rival companies also are looking for ways to extend their corporate footprints even further beyond their eponymous brands. For instance, Mercedes-Benz is reportedly considering launching a new lower-priced brand that would compete with BMW's successful Mini marque and with a planned Audi A1. Meanwhile, BMW executives say they may launch a new brand for manufacture in and export from China, with partner Brilliance Automotive.
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