Europe: luxury trio increases market share but safeguard premium position image

While commending much higher prices, an Audi, BMW or Mercedes-Benz vehicle is more likely to be purchased in Europe than mainstream competitor brands Citroen, Fiat or Toyota.

The three German luxury brands hold the worldwide top selling charts and have long dominated their European home region. But they’re doing it today in a matter they only dreamt off just two decades ago. As opposed to that period, their market share has jumped from 10 percent of the overall European sales to 17 percent. How – simply by “democratizing” luxury and by lifting revenue because they increased sales volume without impacting the crucial, fat earnings margins. The strategy is twofold. First of all, they went below their established entry-point limit that once was the midsize segment and launched smaller models that could become appealing to customers who previously owned mass-market vehicles. And they also flooded the market with models that broke segment barriers – for example the BMW X6 and the Mercedes-Benz CLA.

The European economy has also started its journey towards recovery after being battered by the latest financial crisis in 2009 and the luxury car sector has proven the most resilient of all. And the increased market presence also doesn’t have a negative impact on the overall brand image, according to executives. Last year Audi held the European leadership in terms of luxury sales, with 705,376 units to BMW’s 653,967 and Mercedes-Benz’s 639,462. They were ranked sixth, seventh and eighth respectively across the overall European market after back in 1995 they were tenth, ninth and eighth, respectively.

Via Automotive News Europe