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Has Demand for Luxury Cars Peaked?
Worldwide demand for luxury vehicles has plateaued, thereby threatening the business model of Germany’s Audi, BMW and Mercedes-Benz brands, says Jefferies Group LLC.
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Worldwide demand for luxury vehicles has plateaued, thereby threatening the business model of Germany’s Audi, BMW and Mercedes-Benz brands, declares Phillippe Houchois, managing director of investment bank Jefferies Group LLC.
Houchois tells an Automotive News Europe conference in Sweden that the German premium business model—continuing growth through a proliferation of models touted for their social status—“is probably reaching a peak.”
Jefferies Group has a “neutral” position on all three brands, which means it doesn’t recommend that investors buy shares in the manufacturers. Last year, demand for Audi cars and crossovers dropped 4%. BMW and Mercedes sales rose 2% and 1%, respectively.
But all three brands have cautioned that a global slowdown in sales, coupled with the high cost of developing electric, connected and autonomous technologies will challenge margins this year and beyond.
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