Recently some friends and I were talking about the fact that Mercedes-Benz and BMW are fierce competitors, and I mentioned that Audi was making progress and should also be included in any discussion about leading luxury makes. One of my friends responded, “I’ve been hearing that for twenty years.” His skepticism and sarcasm took me by surprise. I decided to look at the registration data and see if Audi was in fact getting closer to MB and BMW in this country, or not.
Over the past five years, Audi has made a lot of progress in the U.S. luxury market. With several successful new products including the A3, A5, A7 and Q5, Audi’s share of the luxury market* has almost doubled from 4.5% in 2006 to 8.0% last year. However, Audi’s two German rivals have also fared well. BMW’s share has climbed from 14.1% to 16.9% over the same time period, and Mercedes-Benz’s portion has increased from 13.0% to 16.6%. The gap in market share between BMW and Audi has declined slightly from 9.5 to 8.8 percentage points, but the difference between Mercedes-Benz and Audi has grown from 8.4 points to 8.6 points.
Looking at the premium segments, Audi has made tremendous progress with the Q5 in the growing compact premium crossover segment. In 2011, the Q5 out-sold the Mercedes-Benz GLK and trailed the X3 by less than 3,000 units. Audi has also captured about 18% of the subcompact premium segment with the A3, though it trails the BMW 1-Series and Mercedes-Benz is not yet in this category. Audi has also made strides in both the midsize (A6 and A7) and fullsize (A8) luxury sedan categories, where its shares are up more than a point and four points, respectively. Unfortunately, Audi’s rivals have also gained ground in both these categories, propelled by new products. Audi is continually challenged in the compact luxury sedan category, one of the largest in the premium space; the A4 has not been able to gain any traction versus its two more popular German competitors, the 3-Series and C-Class. So, while Audi has moved forward in the U.S. luxury space, its German competitors have kept pace and generally maintained their lead.
While Audi, BMW and Mercedes-Benz have been improving their positions in the premium field, several competitors have been back-pedaling. In fact, five of their primary rivals, including Acura, Cadillac, Lexus, Lincoln and Volvo, have all lost share during the past five years. Lexus has ceded three share points and Acura two. Only Infiniti has managed to retain its position.
There are a plethora of new premium products hitting the U.S. market in the next couple of years, and much of it is concentrated in the compact and subcompact segments. Audi will launch a face-lifted A4 sedan, an A3 sedan, a diesel version of the Q5, and a Q3 slotted below the Q5. BMW will bring an I3 all-electric vehicle, a 4-Series, a hybrid version of the 3 Series, and both X1 and X4 crossovers. Mercedes-Benz will bring out a redesigned GL, a redesigned SL Class, a face-lifted GLK Class, all-new A and B Classes, a diesel version of the C Class, the all-new CLC (baby version of the CLS), and a redesigned S Class. And this is not to mention the new products coming from the other premium makes or the fact that Lexus this year will have replenished inventories with which to challenge the Germans. With this in mind, Polk sees the premium market’s share of the total U.S. light vehicle industry rising from 11.3% last year to slightly more than 12% in 2012.
*Share of the U.S. luxury segments
Posted by Tom Libby, Lead Analyst, North American Forecasting, Polk (03.21.2012)