The German premiums have long been on a roll, producing an export-driven sales explosion and huge returns while mass carmakers struggled through Europe’s crisis.
But in a headlong sales race, second-placed Audi and runner-up Mercedes have both vowed to depose BMW, giving rise to heavy discounting, which sullies luxury brands and creates opportunities for the growing competition, observers say.
Now a host of younger or revived premium marques are poised to follow JLR by pitching dozens of new models against the big three, whose very ubiquity is taking the shine off their prestige.
“The German premiums have sacrificed some of their exclusivity by entering smaller, volume segments like compacts,” said Bernd Hoennighausen, an automotive consultant.
“They’ve pushed volume with fleet discounts of around 20 percent,” said Hoennighausen, who previously managed corporate fleets for Deutsche Bank and BNP Paribas.
“This may open the door to newer players like Jaguar, who are starting to offer fleet-relevant products.”
Among others waging or planning new offensives are Fiat-owned Maserati and Alfa Romeo, Nissan’s Infiniti, and Volvo, a unit of China-based Geely.
For now, the Germans remain firmly on top. Their combined sales amounted to 4.7 million vehicles last year, almost 60 percent of the global luxury car market, according to consulting firm IHS Automotive.
That represents a 38 percent gain since 2007, the eve of the financial crisis, when the big three claimed just over half of the market. Global car sales grew 21 percent overall, while European demand shrank by a quarter over the period.
Superior scale also brings cost advantages – from research to production and marketing – that are not going away. BMW has led the charge into new niches, launching dozens of models including SUVs in every size category, with Audi close behind.
Nonetheless, some analysts believe the tide is beginning to turn against the Germans.
UBS expects the same group of challengers, plus Tesla’s zippy electric cars and DS models from PSA Peugeot-Citroen, to grab 30 percent of global premium sales growth in 2014-18, raising their current 12.5 percent market share.
Read more at Reuters.