The big German three have eaten into the sales of mass market brands by introducing more small cars with their insignia. For the first time ever BMW surpassed Fiat in its European sales. The emerging trend of buying small cars from premium brands has seen luxury car makers experiencing a boost in demand. In the six year European auto sales downturn brands like Audi, BMW and Mercedes-Benz saw 0.5-2% growth in sales while mass market car makers like Ford and Peugeot saw a market share loss of 2 percentage points.
A
larger number of buyers are now ready to shell out over 4000 Euros more to buy
a small car from the German big three, instead of a mass market brand. For
instance, Mercedes Benz offers its cheapest and smallest car, the A-class for
nearly 25,000 Euros while the Volkswagen Golf is available for just under
17,000 euros. It is evident that buyers are looking to splurge a little bit
more if they can get the right logo on their car. Attractive leasing schemes
have baited buyers towards luxury brands and have made premium brands more
accessible to prospective customers. A motorist could lease a BMW 1-series for
330 Euros, a mere 15 Euros more than the lease rate for an Opel Astra.
Daimler
CEO Dieter Zetsche even stated that despite adding a new production line in
Hungary, Mercedes continues to struggle keeping up with the demand for its
small cars. The reflection of this growth can be seen in India as well, with
Mercedes already having launched its A-Class and B-Class hatch-backs, with the
CLA on its way here soon. BMW also recently launched the 1-series and Audi
could bring in the A1 hatch-back and A3 compact saloon which has already been
spied testing on Indian roads. With road congestion reaching new levels across
the globe, people are looking to spend sedan money on premium brand
hatches and compact saloons.
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