The top car manufacturers in Germany were pleased with the high prices of their high-end brands in 2021 because the shortage of semiconductors reduced the supply of cars to larger markets as consumer demand increased.
Prices for every car in BMW, Audi and Mercedes-Benz went up about 25 percent compared to the epidemic before 2019, an audit by Stifel Bank Financial Times has shown.
This increase is due to the change over the decades, in which these companies produce more cars than they sell. The car makers then offered the highest discounts to push more cars to move forward, so that the amount of sales could be achieved in a timely manner.
Since 2019, when the global economy weakened, manufacturers have begun to produce fewer cars than they can sell, the gap has widened to about 4m cars this year. Although there was a similar crisis after the financial crisis in 2009, it was difficult between many years of recession.
“We have seen a three-year decline in spending, driven by [restricted] giving, “says Daniel Schwarz, an expert at Stifel.” It has never happened. “
As a result, revenues from Mercedes-Benz have risen from around € 38,000 per car in 2019 to € 54,000 in 2021 by the end of the third quarter, while Audi has risen from more than € 46,000 to around € 57,500, according to Stifel estimates.
BMW, which has managed to tackle the chip problem more than its peers, and lost less production time, rose slightly, from € 36,000 per car in 2019 to € 38,000 in 2021 by the end of the third quarter. .
Many of these have benefited manufacturers from prioritizing the creation of highly profitable models.
Sales at Mercedes, for example, fell by 30 percent in the three months to the end of September, but revenue fell by only 1 percent.
Stifel’s analysis shows that in just one segment, Mercedes’ revenue and taxes were increased by € 1.4bn due to better prices and the introduction of discounts on high-end, low-cost cars.
With investors looking to see the change, administrators will continue to follow this process despite the domestic crisis.
“There is no compulsion to rush volume,” Merlaes’ boss Ola Kallenius told the Financial Times this month, while Harald Wilhelm, chief financial officer, promised to “look at where the money is.”
“This is a great way not to look down [market] the sections we are in but looking up, will continue, “added Kallenius.
Top car manufacturers were also helped by the rising cost of used cars. This has not only made buying new cars more attractive, but also increased the equipment of premium-making companies, which run large rental businesses.
“Cars are being returned [to the manufacturer] after 12-36 months and the resale price is much higher than previously thought, “said Schwarz.
“Looking at the short-term, the lack of new vehicles today will make the number of used cars smaller for the next two years,” he added. “This should support the prices of new cars.”
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