On the front page of today's Wall Street Journal, the gloomy outlook of the Big 3 German Luxury manufacturers was displayed front and center. The Big 3 German luxury automakers have traditionally been helped by strong profits due to expensive flagship models such as the 7-series, A8, and S-class respectively. However, with American and British consumers left scrambling, sales of the higher-end models have come to a startling decline.
Mercedes-Benz fared the worst of the three in January, posting a 35% decline in global sales to 53,900 cars. Audi posted a 29% global drop in January to 56,200 cars and BMW posted a 22% global drop to 60,248 cars.
Analysts suggest Audi, due to its economies of scale with Volkswagen AG, and its successful A3 model is best positioned to face the storm. BMW is second-best positioned to a market-niche filling, albeit low margin 1-series. Mercedes is worst positioned, but quite frankly, all 3 are in trouble.
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