German automakers use sports sub brands to technologically stay ahead of rivals image

BMW’s M, Audi’s RS, Mercedes’s AMG all boost profit earnings and help with the overall brand image. They also especially push engineering boundaries to their limits. And they translate the “eternal” battle between Audi, BMW and Mercedes-Benz, a fight that goes beyond unit sales and global expansion.

The German automakers are constantly passionate about out-engineering one another with their high-performance sub brands. This year Audi’s RS, BMW’s M and Mercedes’s AMG models will have around 70,000 sales globally. On average, the buyers will give for one of those cars 100,000 to 150,000 euros. The automakers and analysts also say that the margins earned on such cars are significant.

Tim Urquhart, a London-based senior analyst at IHS Automotive: “There are no specific figures for these sub brands, but given the models they make are high-value while still based on the OEMs’ standard ranges, you can bet these models are highly profitable despite their high engineering and technology content.”

The sub brands have close ties to the companies’ racing departments. For instance, BMW’s M was ushered as a special motorsport division. The three brands also compete against each other in the German-centric DTM racing circuit.

The intense competition pushes the automakers to develop cutting-edge technologies in electronics, advanced materials and powertrains. These advancements often move to the M, RS and AMG models and then filter into Audi’s, BMW’s and Mercedes’ volume models.

Via Automotive News Europe