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Market Insight: Top premium brands see growth

1 to watch: BMW is expecting a strong response from buyers to its new-generation 1 Series launched late last year, helping the Bavarian brand to ongoing sales growth in 2020.

Mercedes dominates tough year for leading premium brands but competition to heat up


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17 Jan 2020

MERCEDES-BENZ Cars remained the clear market leader last year among the premium auto brands operating in Australia, holding its volume relatively steady in difficult trading conditions, but competition looks set to intensify in 2020.


The three-pointed star brand finished the year with 31,985 passenger car and SUV sales, a slip of 0.7 per cent compared to 2018 but still 5000 units down on the 37,068 it racked up a year earlier.


This is the marker to which Mercedes clearly wants to return as, like everyone else, it looks to rise above the economic and other factors dousing consumer confidence and hindering sales across the entire market.


A tough ask, for sure. But senior management from many of the leading premium brands are themselves quietly confident of achieving solid growth rates this year based on model launch activity and the freeing up of vehicle supplies that for some companies were heavily restricted due to delays stemming from new emissions testing procedures in Europe.


As it predicted early last year, BMW managed to return a positive result for the full 12-month period, scoring a 1.1 per cent increase to 23,307 units – enough to maintain its clear second position behind Benz but, in similar fashion, still some 5000 short of its 28,028 peak in 2016.


BMW Group Australia managing director Vikram Pawah recently told GoAuto that the Bavarian brand’s ongoing product offensive, combined with a constantly improving dealer network and new customer-centric programs, would bring ongoing growth.


“For us, the target for (last) year was fairly simple. What we said is we’re going to focus on our growth and we’ll deliver growth,” he told us on the sidelines of the all-new 1 Series launch.


“And by us doing that, I think these things are happening automatically – whether we’re taking over someone or getting more market share or getting closer to our competition, things like that, or getting ahead of our competition.


“Our intention for (this) year is going to be clearly that as well, that we’ll continue growing in a market that is going to be uncertain – or (perhaps) not, we don’t know – (but) … we’ll take it to the next level and we’ll continue growing.


“I don’t know whether we’ll end up in the top 10 or not, that’s not my target. My target is to make sure I can get as many customers as possible satisfied, that’s it. I think longer-term, that’s the key for sustainable growth. And I’m here for sustainable growth, not a one-night wonder.”


Audi is anticipating a major return to form this year after posting another disappointing annual result, its sales dropping 19.1 per cent last year to 15,708 units after falls of 11.8 per cent in 2018 (19,416) and 9.3 per cent in 2017 (22,011) – three years of negative returns after 12 years of consecutive year-on-year growth.


Last year’s result was a hefty 8550 units less than the 24,258 it notched up in 2016 at the top of its long unbroken run of record sales, but, as GoAuto has reported, an unprecedented 21 new models and variants are set to be launched this year.


Audi was among the hardest hit by homologation-related stock supply bottlenecks at the factory, as well as a stop-sale on a large portion of its Q7 large SUV range, and it will now look to resume its position as a serious threat to BMW – and, in the longer term, Mercedes-Benz Cars – and distance itself from other fast-approaching brands.


These include Lexus, which bucked the trend with a record 9612 sales last year, 585 more than the previous record set in 2016 (9027) and representing 9.0 per cent growth on 2018 – a figure that owes almost everything to the first full year of trading with the UX compact SUV, which found 1931 homes.


Lexus leapfrogged Land Rover for fourth position among the premium set, the British SUV brand falling 12.0 per cent to 8879 units for fifth ahead of a strong-performing Volvo, which had another sterling year with 7779 sales – up 16.2 per cent on 2018 (6693), when the XC40 small SUV’s addition handed it an instant hit and saw the Swedish brand’s sales skyrocket 43.0 per cent.


Sportscar marque Porsche was another to impress with 4161 sales (+6.4%) – more than the next-best Mini brand (3204, -10.8%) – as was Ateco Group’s locally converted Ram pick-up truck venture with 2868 premium utes (+296.7%), most of them examples of the new 1500 model (2609), rolling out of HSV’s factory in Melbourne.


Tesla is among the brands in the mix here, and while not included in official VFACTS figures, independent sources suggest the US EV brand broke through 3000 units last year with deliveries of the Model 3 finally docking – a huge jump from the 1005 total brand sales recorded by government authorities in 2018.


This places Tesla as a more popular brand last year than Jaguar, which suffered a 15.1 per cent decline to 2274 units, while Alfa Romeo (891, -30.3%) fell back below a four-digit full-year result after a couple of years of solid growth.


As expected, Hyundai’s now-standalone Genesis brand made only a small inroad into the sector with 103 sales, while Nissan’s Infiniti (571, -12.0%) is marking time after announcing last September that it will withdraw from the market before the end of this year.


We note that Mercedes-Benz Vans also continues to stand as a key contributor to premium vehicle sales volume in Australia, posting 6699 sales last year (-8.7%) and picking up incremental growth from its two top-selling models – Sprinter (3349) and X-Class (2126).

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