Thanks to its firm grip on the lucrative premium car segment and a large footprint outside Europe, the German car industry is steering far better through the economic gloom than mass-market rivals elsewhere. Carmakers worldwide have been hit by steep losses and lower sales, particularly in Europe.
The industry is the largest sector in Germany. In 2011, it recorded a turnover of ¤351 billion (Dh1.67 trillion), or around 20 per cent of the total German industry revenue, according to figures released by Trade and Invest Germany, the country’s foreign trade agency.
The automobile industry is also one of the largest employers in Germany, with a workforce of around 712,500 in 2011, producing more than 12.9 million vehicles in the same year — equivalent to 17 per cent of worldwide production. The export share is 77 per cent, which means the major players — Daimler AG, Volkswagen Group/Porsche and BMW — are designing the lion’s share of their models for foreign shores.
Strong demand
One of the most important markets — not in numbers, but in value — for the German car manufacturers is the GCC region with its high demand for luxury passenger cars and luxury four-wheel drives.
The enthusiasm of the Gulf region for German cars has also prompted investors from the Gulf to secure their share of the highly valued companies. Qatar Holding owns 17 per cent of the Volkswagen Group. In 2009, Aabar Investments, a stock fund owned by the Abu Dhabi Government, invested $2.7 billion (Dh9.91 billion) in Daimler and was holding 9.1 per cent of the German company until it recently sold off all stakes last month, shortly after the Kuwait Investment Authority stoked up its stake in Daimler from to 7.6 per cent from a previous 6.9 per cent.
As for the UAE, all German premium brands reported record sales this year, with strong sales of large sedans and especially four-wheel models, which enjoy great popularity in the Middle East and especially in the wealthy Gulf countries — probably the last global bastion of big, powerful engines and large-bodied cars.
Audi, for example, says the UAE is the most important Middle Eastern market for the brand in terms of volume. A total of 2,747 units were sold in the first three quarters of 2012, an increase of 12.2 per cent. GCC overall sales increased by 26.5 per cent to 6,629 units in the first three quarters of 2012, mainly C- and D-segment sedans and SUV models. Saudi Arabia and Kuwait followed the UAE, with sales of 1,420 and 948 units and a growth of 36.1 and 29.7 per cent respectively. “We are on track for a record year in 2012,” says Jeff Mannering, Managing Director, Audi Middle East.
“Several markets of the region were affected by political unrest. However, the larger countries, particularly the UAE and Saudi Arabia, are pulling ahead on the back of strong core models, new model launches and improved infrastructure in sales and after-sales service,” adds Mannering.
Moritz Drechsel, Spokesman — Marketing and Sales of Audi AG in Germany, tells GN Focus: “Despite the difficult conditions in important European markets, Audi continues to grow in every region worldwide.
“We are well on track to achieve the company’s worldwide sales target of 1.4 million deliveries for the year.”
Drechsel points at strong sales in the US and China, where sales figures rose by 18.5 and 31.4 per cent respectively in the first three quarters .
Double-digit gains
BMW reported a 15 per cent sales growth across the Middle East over the first nine months of the year, with a total of 15,805 vehicles sold. The company says it is making gains in almost all GCC markets and most importers are recording double-digit growth.
The UAE remains the biggest market in the Middle East, accounting for 48 per cent of BMW and Mini cars sold in the region during the first nine months of the year, followed by Saudi Arabia and Kuwait, says Alexander Eftimov, Director of Sales and Marketing, BMW Group Middle East.
Markets that showed good individual sales increases included Jordan which grew by 50 per cent, Oman by 40 per cent, Kuwait by 31 per cent, Abu Dhabi by 30 per cent, Qatar by 19 per cent, Lebanon by 18 per cent and Saudi Arabia by 14 per cent. The BMW 5 Series remained the company’s most popular model, followed by the X6 and X5 SUV models.
Abu Dhabi remained the best-selling market for BMW in the Middle East, with 30 per cent growth for BMW and Mini and the highest number of Rolls-Royce car sales in region, says Arno Husselmann, General Manager of Abu Dhabi Motors, without giving sales figures for the super-luxury brand.
Sports carmaker Porsche reported a 14.7 per cent sales increase to 104,362 worldwide in the first nine months of 2012, with all regions except Europe experiencing solid growth. The company did not give any sales figures for the Middle East. In Asia, sales grew 25.8 by per cent to 37,477 cars.
“2012 looks like another promising year for our brand, due to our strong brand awareness and international demand-driven sales management,” George Wills, Managing Director, Porsche Middle East And Africa, tells GN Focus.
Asked if a possible slowdown in European sales can be absorbed by higher exports to emerging regions such as the Middle East and Asia, Wills says, “[Although] the overall development of the automotive sector is very difficult to predict, right now we are in a position where demand surpasses supply for most of our models by far and we actually have to manage customer expectations with regard to waiting times.
“Demand in the UAE for all Porsche models across the ranges is as per our forecasts, an indication that 2012 will prove to be another good year for us. The UAE is our strongest market in the region with almost 33 per cent of our total deliveries.”
Year of the SUV
Mercedes-Benz, the premium brand of Daimler AG, also reported record sales in the first three quarters of 2012. Sales were strong in North America, China (including Hong Kong) and Russia, where the brand recorded the highest year-to-date sales growth ever of around 25 per cent.
The Middle East saw sales surging by 19.9 per cent. With a sales increase of 31.7 per cent, September was the best-selling month ever in the Middle East, the Stuttgart-based company reported last month. The most popular model in the Middle East and Levant was the latest generation E-Class, with more than 15,000 units sold, says Frank Bernthaler, Director, Sales and Marketing, Mercedes-Benz Cars, Middle East and Levant. To boost sales for the new M-Class SUV launched earlier this year and high-performance AMG models, Mercedes-Benz Middle East has declared 2012 the Year of the SUV and AMG.
