It’s a strange world. Europeans are changing their already small cars for tiny ones. Manufacturers fall over themselves building ever smaller and cheaper cars. In the USA, small cars are suddenly big. Ford’s analyst George Pipas says that this year, small cars accounted for 21 percent of all U.S. vehicle sales. By 2013, Pipas predicts that compact cars, subcompact cars and crossover vehicles built off small car platforms will account for 36 percent of total new vehicle sales in the United States. Car executives that still have a job bemoan the times where big cars meant big profits.
A new frugality is rampant on the globe. Makers of luxo-barges, such as BMW and Mercedes are in big doo-doo.
They would be in much deeper excrement, would it not be for – China. For November, Mercedes, Audi, and BMW all reported huge increases in car sales to China. Mercedes-Benz said it posted record sales in China. China has become the fourth-largest market for Mercedes. A total of 8,700 passenger cars were delivered in China in November, nearly three times the number sold in the same month a year ago. Sales of Mercedes-Benz vehicles to other former poorhouses are up also: Up 81 percent in Brazil, up 25 percent in India.
Audi sales in China more than doubled to 16,503 cars in November. Audi thinks, China will pass Germany as its largest market within two or three years. In November, BMW sold 8,470 cars in the Middle Kingdom, up 40 percent.
BMW and Mercedes are moving more production to China. BMW is building a second plant with the Chinese joint venture partner Brilliance. Daimler also announced that they will triple their Chinese capacity.
Yale Zhang, a senior Shanghai-based analyst with U.S. consulting firm CSM Worldwide, said to the Wall Street Journal he expects China’s premium-car segment to grow 26 percent to 315,000 vehicles next year.