BMW beats Mercedes-Benz to claim first U.S. luxury sales crown

[LeMansX5]

BMW beats Mercedes-Benz to claim first U.S. luxury sales crown

From Automotive news

BMW fended off a late-year surge by rival Mercedes-Benz to win its first title as best-selling luxury brand in the United States.

BMW said Thursday that U.S. sales rose 15 percent to 26,834 in December, for an annual total of 247,907. Mercedes said its sales last month climbed 28 percent to 25,701, pushing its tally for the year to 245,192.

The results officially end Lexus' 11-year reign atop the U.S. luxury rankings. The Toyota Motor Corp. brand reeled after the March earthquake in Japan disrupted production, finishing the year down 13 percent at 198,552. Mercedes won the title once, in 1999, before ceding the U.S. crown to Lexus.

Thursday's announcements also capped an unusual end to the reporting of annual auto sales. BMW of North America and Mercedes-Benz USA were the only companies that failed to release U.S. totals along with the rest of the industry on Wednesday, drawing more attention to the luxury race.

The results exclude Mercedes Sprinter vans and Smart cars as well as BMW's Mini brand, which aren't luxury vehicles.

BMW sales advanced 13 percent for the year in an overall market that rose about 10 percent. Mercedes' U.S. deliveries also climbed 13 percent, aided by a refreshed C-class sedan and redesigned M-class SUV.

Mercedes advanced after BMW ended the third quarter leading its German rival by 7,621 U.S. sales. The lead narrowed to 1,582 by the end of November.

Both automakers increased incentives in November and carried forward customer discounts into December, according to Ivan Drury, an industry analyst with Edmunds.com.

Mercedes increased incentive spending in November by 39 percent compared with a year earlier, and BMW's incentives rose 25 percent, according to Autodata Corp. Many of those discounts and incentives are on the C class and 3 series, which are the automakers' top sellers.

Rivals have noticed the discounting.

"They've been outspending us--even with some relatively newer products," Kurt McNeil, Cadillac's vice president of sales, said in a telephone interview. BMW has offered $400 to $600 a car more than the General Motors brand, he said, and Mercedes' discounts exceeded Cadillac's by more than $1,000. "They've been bringing it from an incentive standpoint," he said.

While some automakers in the past have delayed releasing monthly results, "this is unusual," Jesse Toprak, an industry analyst with TrueCar.com, said Wednesday. "I don't really recall this happening from two automakers who are clearly going head-to-head against each other. It's too much of a coincidence."

BMW Group Achieves Second Best Sales Year Ever in the U.S. -- WOODCLIFF LAKE, N.J., Jan. 5, 2012 /PRNewswire/ --

[Alan Smithee]

Vying for highest sales volume in a segment, especially by providing incentives, is incongruous with a "luxury" brand. I am not impressed.

[Richard in NC]

Originally Posted by Alan Smithee

Vying for highest sales volume in a segment, especially by providing incentives, is incongruous with a "luxury" brand. I am not impressed.

I disagree. Incentives, IE appropriate pricing is a characteristic of capitalism and the free market, regardless of the commodity. And I only took a few economics classes....

I am impressed with the 40k X5s and 50k 5 Series, incentives or not.

[Alan Smithee]

Originally Posted by Richard in NC

Incentives, IE appropriate pricing is a characteristic of capitalism and the free market, regardless of the commodity.

It is a characteristic of oversupply, and the result is devaluation of the brand.

The formula did not work for GM and Chrysler in the long run, and it will not work for BMW and MB, either.

[LeMansX5]

Its not just that BMW was providing the incentives. Mercedes was providing huge incentives as well. The race was to have the "#1 in US" crown, as Lexus has been #1 since 2000 and this year supply problems crippled them, leaving BMW and Benz in race. Lexus may be back next year.

[BGM]

BMW has been one of the few car companies during the "recession" that has had continual growth in sales. That's not correlated to incentives or over-supply. In fact, BMW has down-sized their dealer allocations during that time. And, yes, my degree is in Economics.

[Alan Smithee]

How, exactly, did BMW experience "continual growth in sales" with "down-sized dealer allocations"? By opening new dealers "during that time"? I think not...

[BGM]

Originally Posted by Alan Smithee

How, exactly, did BMW experience "continual growth in sales" with "down-sized dealer allocations"? By opening new dealers "during that time"? I think not...

Dealer allocation does not include cars that are ordered. Which is a substantial amount.

[Price]

Originally Posted by Alan Smithee

Vying for highest sales volume in a segment, especially by providing incentives, is incongruous with a "luxury" brand. I am not impressed.

I somewhat agree, although while the segment BMW/Merc/etc position themselves is called "luxury", in reality it's more of a "premium", or "upscale", rather that "exclusive", so the risk of diluting the brand is not as high as for, say, Aston Martin brand (regrdless whether AM are trully great cars or not). And yes, BMWs incentives have been always huge, the subsidised leases alone contribute greatly.

[Alan Smithee]

Originally Posted by BGM

Dealer allocation does not include cars that are ordered. Which is a substantial amount.

I know for a fact that is not how it works with PCNA, where orders come out of dealer allocations. Perhaps BMWNA works differently, but it does not make sense to me that it would. Also doesn't make sense to me that during a recession, the amount of "ordered cars" increases vs. "allocated cars", making up your claimed delta between reduced allocations and increased sales. That would imply dealers were without cars on lots, which certainly has not been the case in this area the last few years...