Sales of premium cars and SUVs fell more steeply than “volume” brands after
the financial crisis. Globally, the former’s share of the light vehicle
market shrank from 8.3 per cent to 7.6 per cent between 2008 and 2009,
according to LMC Automotive.
Now, though, this end of the market is enjoying a faster recovery. Its sales
are expected to be up about 11 per cent this year and about 6 to 8 per cent
in 2012 – compared with gains of 4 to 5 per cent for the market generally.
BMW
That is welcome news for German automakerssuch as BMW, which yesterday posted
best-ever sales in 2011, up 14.2 per cent at 1.67m vehicles.
There are good reasons for thinking this market trend will continue. While the
phenomenal growth in Chinese car demand over the past decade may be cooling,
the country’s appetite for premium vehicles still appears to be expanding at
very healthy rates.
More than 970,000 top-end vehicles are thought to have been sold there in 2011
(15 per cent of the premium market globally), up from under 700,000 in 2010.
That figure could exceed 1.1m in 2012 (a decade ago, it was little more than
30,000).
Russia, although a much smaller market, is also hot. And US demand is
recovering nicely.
Europe and euro
As with the car market generally, the big worry is Europe, where sales of
premium vehicles will probably dip in 2012. There is also the issue of
incentives in the US, with signs that German brand manufacturers such as
BMW, Porsche and Daimler began to increase these in the second half of 2011.
Conversely, though, any further weakening of the euro against the dollar or
the renminbi has to be helpful. BMW shares are trading at about 7.5 times
forecast 2012 earnings, compared with about 4 times for Renault and PSA
Peugeot. But, on this occasion, premium product deserves a premium rating.
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