Is Germany Flooding The Market With Too Many Luxury Models?

Chalk it up to cabin fever, a burgeoning economy or the dulcet drone of Mercedes pitch-man Jon Hamm. Sales of German luxury cars have never been better.

In the first three months of the year, Audi, BMW and Mercedes sold 1.3 million vehicles worldwide, 9 percent more than in the year-earlier period. The Teutonic bragging rights stayed with BMW. It sold almost 451,600 vehicles around the world in the first quarter, besting 438,200 at Audi and 429,600 for Daimler's Mercedes Benz brand. Records were broken all around.

Of course, the whole exercise is a bit silly. Talking about volume without strapping it to profit is like spouting off the specs of an engine without mentioning the size of the vehicle in which it sits. But this is the auto industry. Underneath every Hugo Boss suit in the C-suites of Munich and Stuttgart is a person who simply loves to go fast (preferably on the autobahn en route to a screening of Furious 7). Steering is crucial, but speed is king.

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cidflekken - 4/14/2015 5:03:21 PM

+5 Boost

If Caddie's marketing head thinks that the "ubiquity of the Germans" is its biggest opportunity, then Cadillac is in for a long ride. Yes, you see German luxury cars everywhere, but that's been the case for decades, and recent sales numbers just proves that they are just continuing to grow. Buyers don't seem to be phased by that and, more importantly for Cadillac, buyers aren't flocking over to their brand for something more unique. The Germans and Lexus still have the prestigious reputation that Cadillac still is striving for and I don't think that's going to change anytime soon. If anything, with cars like the AMG-GT, the RCF, the i8, and the new R8, those reputations may just continue to get stronger, leaving Cadillac even further behind without a truly competitive flagship and/or performance model in their lineup.

TomM - 4/15/2015 7:46:43 AM

+4 Boost

I think the problem with Cadillac is not quite what you say - although you are close. Cadillac - with its smaller - tighter - more nimble (As they say) cars is obviously targeting the European market with their cars - where they are LIKELY to sell poorly because of the German lead. In China and the USA - where Cadillac is still considered a LUXURY brand - the cars are not big enough for the buyers. Why buy a CTS that has interior room similar to a Toyota Corolla. In the USA - we prefer larger Luxury cars - and in China - Luxury cars normally have drivers - so the rear seats are paramount. Cadillac has not produced a vehicle that specializes in REAR SEAT room and Luxury at all.

I disagree with you on the "performance" side -the V class Cadillacs have the performance - but they compete in a market that - in reality - has FEW sales. Mercedes had to recognize that - now that they have moved more toward the Luxury side with their regular offerings - and allowed the perfomance side to the AMG models - which command much higher prices.

THe question is - what is COMPETING? If similar traits and features - and good performance is the area - Cadillac does that. However - Cadillac was once the quintessential AMERICAN LUXURY car - not aluxury performance car. Cadillac has abandoned that market knowingly (IN fact - DeNysshen's comments about those buyers have turned a lot of people off - me included). Lincoln - with the New Continental - will take that market simply because there is no competition there. And Cadillac really has no hope of keeping up with the Germans - their ATS-CTS duo were good for a year - and then the Germans overcame them again.

Benzes1 - 4/15/2015 1:53:21 PM

+2 Boost

BINGO!!!

TheSteve - 4/14/2015 5:29:25 PM

+5 Boost

Whatever the German luxury makers are doing, it sure seems to be right. It seems to be a two step:
(1) Attain a very high level of desirability
(2) Offer something very desirable at just about every price point

#1 gets people in the door.
#2 lets them leave with your product.

Note: 2 doesn't work well without 1.

Benzes1 - 4/15/2015 1:54:59 PM

+2 Boost

BINGO, again!

You guys get it.

carsnyc - 4/16/2015 12:40:11 PM

+1 Boost

Wow! I hope somebody at Cadillac read this e-trail cuz it would do them a lot of good.