Bloomberg News

BMW, Audi Plan to Beat Industry Growth After Record Sales

January 09, 2012

(Updates with Porsche sales in seventh paragraph. See SHOW <GO> for top Detroit auto show news.)

Jan. 9 (Bloomberg) -- Bayerische Motoren Werke AG, Audi AG and Daimler AG, the world’s three biggest luxury-car makers, said they plan to grow faster than competitors in 2012 after setting sales records last year.

Deliveries at BMW this year will rise by a single-digit percentage that outpaces the car market’s expansion of 4 percent to 5 percent, Ian Robertson, the company’s sales chief, told reporters today at the North American International Auto Show in Detroit. The chief executive officers of Audi and Daimler said they expect their sales to exceed market growth of 4 percent.

BMW’s namesake brand maintained its top rank in luxury-car sales in 2011, helped by new versions of its X3 sport-utility vehicle and 5-Series sedan. Audi, a unit of Volkswagen AG, overtook Daimler’s Mercedes-Benz marque to place second. The carmakers are counting on new models, such as the updated Audi A4 and Mercedes-Benz SL roadster on display at the Detroit show, to sustain demand as they jostle for industry’s lead.

BMW and Audi “are well positioned, and their product range means they’ll both grow, but I find their estimates for market growth optimistic,” said Christian Ludwig, a Bielefeld, Germany-based analyst for Bankhaus Lampe who recommends buying Volkswagen and BMW shares and holding Daimler. The sovereign- debt crisis in Europe will hurt sales in the region, and “I see between 0 percent and 1 percent growth as possible globally.”

Mini’s Sales Gain

Deliveries by the BMW brand jumped 13 percent last year to 1.38 million cars and sport-utility vehicles. Group sales at Munich-based BMW, including the Mini small-car division and Rolls-Royce super-luxury marque, rose 14 percent to 1.67 million vehicles. Ingolstadt, Germany-based Audi’s sales increased 19 percent to 1.3 million deliveries.

Mercedes-Benz posted an 8 percent gain to 1.26 million cars and SUVs. Including a 4.6 percent increase for the Smart two- seat brand, sales at the Mercedes-Benz Cars division of Stuttgart, Germany-based Daimler rose 7.7 percent to 1.36 million deliveries.

Porsche SE, the maker of the 911 sports car and Cayenne SUV, said today that sales last year increased 22 percent to 118,867 vehicles, also a record.

BMW Shares Gain

BMW rose 2.3 percent to 56.84 euros at the close in Frankfurt. That pared the stock’s decline in the past 12 months to 2.8 percent. Daimler gained 0.7 percent to 36.73 euros, narrowing the 12-month drop to 32 percent. Volkswagen’s preferred shares fell 1.8 percent.

Models that the luxury automakers are introducing at the Detroit show include Audi’s prototype of the compact Q3 SUV that it aims to sell in the U.S. and the carmaker’s updated A4 sedan, as well as Porsche’s new 911 convertible. Mercedes is presenting a new version of its A-Class, the brand’s cheapest model, in addition to the two-seat, 93,534-euro ($119,200) SL, which has an aluminum frame to reduce weight and improve fuel efficiency.

Audi plans to build the Q3’s U.S. version in late 2013, CEO Rupert Stadler told reporters today.

German luxury-car manufacturers’ sales last year were propelled by demand in China, where they all posted sales gains of at least 30 percent, led by a 65 percent jump for Stuttgart- based Porsche. Audi’s Stadler estimated today that China’s market will expand about 8 percent in 2012.

‘Slowing’ Chinese Market

“China is slowing down, but it is still a market that for the premium makers will grow by about 20 percent this year.” said Arndt Ellinghorst, a London-based analyst at Credit Suisse who has a “neutral” recommendation on Daimler an “outperform” on BMW and Volkswagen.

Sales growth in China at Daimler amounted to 31 percent, the biggest national increase for the carmaker.

The German company, which has had talks in the past with potential Chinese investors, has no immediate plans to sell a stake to a shareholder in that country, Daimler CEO Dieter Zetsche said at the show today. He was commenting on a Manager Magazin report in December that said Daimler is seeking an investor from China to buy a 5 percent to 10 percent stake.

Zetsche is “very optimistic” that Mercedes-Benz will reach a goal set last year of returning to the No. 1 spot in global luxury-car sales by 2020, and he isn’t ruling out beating the deadline, the CEO said in a Bloomberg Television interview from the Detroit show. BMW overtook Mercedes-Benz as the industry leader in 2005.

Daimler’s Profit

Daimler will probably remain profitable this year, and it will stick to a policy of paying out 40 percent of profit in dividends, he said at a separate briefing. Daimler isn’t planning any buybacks, he said.

Audi’s sales gains contributed to a 14 percent sales jump at Volkswagen, Europe’s biggest carmaker, which delivered a record 8.16 million cars, SUVs and vans last year. VW’s namesake brand sold 13 percent more vehicles at 5.09 million deliveries, and sales at the van unit jumped 21 percent. The Skoda brand’s deliveries rose 15 percent and the Seat brand’s increased 3.1 percent.

Audi is likely to maintain its second-place luxury-car industry rank until 2014 or 2015, as Mercedes-Benz needs to build up sales of the lower-priced A-Class and B-Class lines, Credit Suisse’s Ellinghorst said.

--With assistance from Frederic Tomesco in Montreal and Betty Liu in New York. Editors: Tom Lavell, Chad Thomas

To contact the reporters on this story: Chris Reiter in Detroit via creiter2@bloomberg.net; Alex Webb in Frankfurt at awebb25@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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