Blog: Dave LeggettBMW beating Benz

Dave Leggett | 8 July 2004

I’ve just been asked by the BBC if I can go up to London and be interviewed about BMW beating Benz, in terms of group car sales figures, for the first time in seven years (first six months sales figures). BMW’s lead reflects the impact of new models like the X3 and 6 Series, as well as the continued group sales boost derived from Mini. And the 1 Series is yet to impact the market, so it's hard to see DC regaining this particular crown soon.

The news won’t go down well at DaimlerChrysler, but it may strengthen the hand of DC’s management in wanting wage cuts in order to become more competitive with BMW and enjoy similar levels of profitability.

Alas, the interview is a non-starter. After a bout of travelling recently, I’m well and truly desk-bound at the moment and I am also not feeling too good today – hay fever is bad, plus I have caught a cold and feel like I have been hit over the head with a shovel.

But I did speak to analyst Pete Kelley at JD Power-LMC earlier this morning concerning the sluggish German car market. The big problem at the moment: consumer confidence and unemployment. Unemployment looks like the key statistic that needs to change if the German market is going to come back. 2004 looks like a write-off, but 2005 could see the start of a fairly modest sales recovery if the economy starts to look better.

But Pete did emphasise the unemployment question and the effect that joblessness is having on consumer psychology. DC’s experience in negotiating with workers has been that they are not yet prepared to take wage cuts to protect jobs. But other companies are getting higher productivity deals, so it is probably a matter of time. Tough times in Germany generally right now though.


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