Demand for Luxury German Cars is “bottomless” especially with the growing China Market
There’s a three-to-four month wait for a new 5 Series and BMW has raised its 2010 global forecast to 1.4 million units. Mercedes-Benz Q2 production exceeded 300,000 units and Daimler’s operating profit for the period was €2.1 billion ($2.7B U.S.) Audi’s percentage increase in sales in 2010 compared to last year has outdone both BMW and Benz. The reasons for all that, says Bloomberg, is new product, growing U.S. demand and Chinese-market growth “that’s way beyond expectations.”
While there’s an undeniable story in the recovery of U.S. sales, this is even more so about China. The demand for luxury by that country’s million or so millionaires and their underlings is a leather-lined sinkhole, and the three German manufacturers are doing everything they can to fill it. Their best is barely enough. Benz and Bimmer have added workers and shifts this summer to try and fill orders.
From the sounds of it, they might not be able to manage that this year – China’s appetite is such that the demand “won’t be easily derailed even if economic growth slows,” according to one analyst. If nothing else, and assuming the analyst is correct, it should lay a decent foundation for 2011 and perhaps allay some concern about that double-dip recession talk.
[Source: Bloomberg via BusinessWeek | Image: Doug Kanter/AFP/Getty]