Despite an ongoing economic slowdown, wealthy buyers around the world are still queuing up to buy German luxury cars.
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Daimler has raised its full year forecast after second quarter profit beat analysts’ estimates. BMW, the largest luxury carmaker, has also lifted its 2010 sales and earnings projections while Audi’s first half increase in vehicle sales beat those of both its German rivals.
Analysts said the Chinese appetite for German luxury upscale cars appears to be bottomless – unsurprising given that there are now some 900,000 millionaires in the country.
Mercedes-Benz, BMW and Audi are posting gains in China. BMW last week said it would have to ship 10,000 extra 3 series units to China as its local assembly JV with Brilliance no longer can meet demand while Audi is benefiting from strong demand for its new A8. The launch of the long-wheelbase version of this model last week was expected to boost sales further.
Mercedes-Benz aims to add market share with an extended E-Class sedan, its first vehicle designed specially for Chinese consumers. BMW and Audi already sell such lengthened models in China.
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By GlobalDataAll three German automakers are taking on additional workers and reducing summer factory breaks to boost production of luxury cars.
Daimler has hired 1,800 temporary workers and added Saturday shifts at German assembly plants making the SLS gull wing doors sports car, GLK SUV and recently redesigned E-class convertible. Audi is putting on extra shifts and BMW has added 5,000 temporary workers and will give all employees covered by a wage agreement EUR1,060 (US$1,370) on average in a one off payment.
BMW last week raised its 2010 forecast, predicting sales will rise about 10% to more than 1.4m vehicles, while the operating margin will exceed 5%. The company increased first-half group deliveries 13% while Mercedes-Benz posted a 12% gain.
Mercedes parent Daimler has just reported second-quarter operating profit of EUR2.1bn (US$2.7bn) as sales rose 28% to EUR25.1bn ($32.4bn).
Analysts said the German luxury car makers are benefiting from their product portfolio and their regional positioning especially in the surging North American and Chinese markets.
