The crown of the world’s biggest luxury car brand is always coveted for automobile companies all over the globe. Recently, in the global automobile circles, Mercedes-Benz is said have won the crown snatching from its nearest rival BMW. Beside a steady increase in sales, an overwhelming popularity among the young buyers in various car markets across the globe paved the way for Mercedes-Benz to emerge as the biggest brand.
Luxury vehicles from BMW faced a clear decline in sales figures similarly UK market leader Ford, more info here, also suffered compared with Mercedes-Benz. By introducing sporty remodelled versions of youthful SUVs, the three-pointed star brand made a sensational presence all throughout the year and sold nearly 80,000 more cars than its nearest rival in the luxury car segment. The feat is made more incredible with the fact that the European car market is facing a continuous slowdown for some years.
The increasing threat of trade barriers in North America and UK has already took a toll on the car market. This is one big reason the performance and growth of sales of Benz should be viewed with more admiration.
Some recent statistics confirm how the brand is consistently performing in comparison to the major automobile brands. The global delivery figure of Mercedes rose to a staggering figure of 2.08 million. Mercedes after lagging behind BMW for more than a decade since 2005 finally emerged as the market leader with a strong comeback in sales figure of recent years.
BMW vs Mercedes-Benz
In the last quarter of the previous year, BMW’s sales head Ian Robertson predicted that the sales figure is likely to drop in the beginning of 2017. Some of the crucial reasons contributing to this slowdown is the Brexit and slowed down economic growth in many major markets including that of China, according to him. To comply with this view, BMW CEO Harald Krueger also said openly that his primary focus is on profitability than sales. He also said about the company’s shift of focus on coming with new electric cars and cars with features corresponding to self-driving.
However, the emergence of Mercedes-Benz as the clear winner in luxury car segment does not only come with the downfall of BMW. Other major luxury car brands from Germany are facing a similar challenge.
In the luxury car market, other small brands are making the turf of competition tougher too by rapid expansion. Some of these brands like Jaguar, Volvo, and Tesla Motors are increasingly coming with more feature rich alternatives and enjoying higher response in the luxury car market. More than any other brand, BMW suffered the onslaught because of lack of economic solvency to support new big projects and expansion plans.
Actually for years, the huge spending by the company in research and development made the hole in the pocket bigger while decreasing profitability. On top of that the revamp and refurbishing of BMW models further weighed down the earnings of the company.
The Cost For Groundbreaking Vehicles
The automobile market, especially the luxury car segment, is increasingly being driven by innovation and breakthrough new features and this obviously does not come without putting an enormous cost burden on the companies.
For example, in the recent times we have seen global automakers face the staggering cost burden due to the electric and battery powered vehicle projects. While most of these projects faced the barrier of strict emission criterion, the sales of these vehicles are not significant enough to make up for the cost incurred by research and development.
Facing A Challenging Political Scenario
Let’s take a look at the experience of other brands such as Ford. If you look at the steady sales performance of FordTransitDirect, the largest dealer network for Ford cars, you will realize why brands from other parts of the globe could really withstand the drastic effect by major political decisions and turmoil faced by situations following the Brexit. But in complete contrast there are several brands that have been badly hit by change in the political mood in US and decision of UK to severe economic ties with European Union.
While BMW for years has been producing most of its crucial subcompacts yielding a huge export volume for cars and engines, the new pro-Brexit era curved a big hole in the sales volume and pulled the sales figure to a great extent.
In contrast to BMW and many other brands Mercedes-Benz really found itself in a stable growth and in a trying time it came out as a winner in the luxury car market.