Sunday, 22 September 2013

Big German Trio Win With Small Cars

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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