BMW and Mercedes Fight ‘Till the End for Number One Spot in U.S. Sales

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Lexus’ 2011 fall from grace after a decade was only natural to result in its two main competitors, BMW and Mercedes-Benz, to battle it out for the first place in the premium car segment sales in the States.

Even though there is less than a week left until the year comes to an end, the outcome of this battle is still undecided: despite Mercedes having outsold BMW in October, heading in December, BMW sold 221,073 units in the U.S. market, 1,582 more than Mercedes-Benz.

With such a small difference, it can go either way. Therefore, both premium carmakers are trying to lure customers by offering significant discounts and low lease rates.

One such example is 47-year old Mike Goodstein who lives in Columbus, Ohio. He was offered a very good lease deal on a BMW 535xi, and he snapped it up. “I bought it now because, quite frankly, around the holidays is the best time of the year to buy one”, he said. “They have all kinds of rebates and holiday cash.”

The two rivals have increased their 2011 sales, BMW by 12.3 percent and Mercedes by 11.8% compared to last year by letting dealers offer discounts to select customers in order to achieve “conquest” sales – that is, sway them in picking their own car instead of their rivals.

They are indeed going to great lengths to secure the number one spot: TrueCar.com reports that they are both offering US$4,800 discounts, although in a more subtle way than mass manufacturers.

For example, they subsidize the interest rates which can be as low as 0.9 percent, waive the first couple of months of lease payments, increase the residual value of the vehicle when the lease expires and add further discounts for returning customers.

As a result, sales of premium vehicles in the U.S. increased by 35 percent in November. CEO of AutoNation, the largest dealer in the country, says that “the new vehicles haven’t just been home runs, they have been grand slams”.

It appears that the two Germans are the only ones who are winning. Honda’s Acura and Nissan’s Infiniti luxury brands' sales are down, Ford’s Lincoln is flat, and only GM’s Cadillac has increased its sales compared to last year, if only by 4.9 percent.

Story References: WSJ


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