German manufacturers’ US sales exceed 1 million mark
Market share rises for seventh year in succession – Clean Diesel campaign – more local production
Detroit/Berlin, January 9, 2012. As the North American International Auto Show (NAIAS) got under way, the German Association of the Automotive Industry (VDA) held a press conference on Monday in Detroit, Michigan, USA. The statement by VDA President Matthias Wissmann is reproduced below:
"This January we are especially pleased to be here by the Detroit River. In 2011 the US auto market turned out to be very robust. Sales of light vehicles (passenger cars and light trucks) rose by 10 per cent over the course of 2011 to 12.7 million units. This means that – with this definition – it remains the largest automotive market in the world. This confirms our forecasts at the VDA. The US labor market has relaxed somewhat, and unemployment (for December) has come down to 8.5 per cent and now equals the level of two and a half years ago. And compared with the previous month it has fallen by 0.2 percentage points.
Consumer confidence is once again on the rise, and this applies both to the assessment of the current situation and to the expectations concerning future developments. In 2012 private consumption will increase in the range of 1.5 to 2 per cent, as will the US gross domestic product. Investments are expected to climb by a good 7 per cent. In recent months a lot has been written about the difficult labor and real estate markets in the United States. But if we look at the indicators for this automotive market, we find that apparently these challenging overall conditions are not holding back the US auto buyers as strongly as some experts had supposed!
I expect that the US automobile market will continue to grow in 2012. It will not expand quite as fast as before, but an expected rise of 5 per cent means that sales of light vehicles will climb to 13.4 million units this year. In comparison with the crisis year of 2009 this is an increase of 3 million new vehicles. This change alone almost equals total sales on the German passenger car market!
Furthermore, we at the VDA expect that the replacement of existing light vehicles, the market launch of numerous new models, the stabilization of gasoline prices, and lower cost of financing will impact positively on demand in the US election year of 2012.
The opportunities for the North American market also look promising in the medium and long term. This is shown by the basic data and long-term growth indicators. The average age of US citizens is 37, which is much younger than the German population (at 44). In addition, the United States’ population is currently growing at a rate of 1 per cent – significantly higher than in Germany (at +/- 0 per cent). The IMF forecasts that this population growth in the US will be maintained in the next five years. And so more young people will need more new cars in the future.
The two last years have shown that the US remains an automotive country. In this vast country – not to say continent – US citizens need their cars, and they do not want to go without them. In view of higher fuel prices, however, they are watching consumption more and more closely. In this field in particular, the German manufacturers have tailor-made models on offer, which cannot be beaten by any of their competitors on fuel efficiency. They also score top marks on safety, quality, comfort and vehicle dynamics.
For the German manufacturers, 2011 was an especially significant year. For the first time our US sales of light vehicles exceeded the 1 million mark (1.04 million to be exact). This corresponds to year-on-year growth of 18 per cent. Thus, for in the seventh year in succession we have expanded faster than the market itself and have continually gained market shares: from 5.1 per cent in the year 2005 we have climbed year by year, and our market share in light vehicles is currently 8.2 per cent.
The US light vehicle market is divided into passenger cars and light trucks. The light truck segment (pickups, SUVs, CUVs and vans) is slightly larger: 52 per cent of all light vehicles newly registered in 2011 were in this sector, so the share taken by cars was 48 per cent.
Growth again for German producers in passenger car segment
The German OEMs are traditionally more strongly represented in passenger cars. In 2011 they pushed up their sales in this segment by 13 per cent, to nearly 754,000 units, while the total passenger car market grew by 8 per cent to 6.1 million units. This means that one new car in eight registered in the US in 2011 was from a German group brand.
In the luxury segment, the German brands take 44 per cent of the market, which gives them a dominant position. This segment – which is called "luxury cars” in the official Ward’s categorization – is not comparable with the categorization in Germany, but instead also includes models such as the BMW 1-, 3- and 5-Series, the Audi A3, A4, A6 and the C- and E-Class by Mercedes-Benz. So nearly half of all cars in the luxury segment that were sold in the US in 2011 bears a German badge. At around 437,000 units, six out of ten passenger cars sold by German makers in the US belong to the luxury segment.
The German manufacturers will continue to build on their good position with new hybrid models being premiered today at the Detroit Motor Show (including the BMW ActiveHybrid 3, the BMW ActiveHybrid 5, the Mercedes-Benz E300 Bluetec Hybrid (a diesel hybrid that requires only 4.2 l to cover 100 km), and the Mercedes-Benz E400 Hybrid).
And in the medium segment (e.g. the VW Passat, CC) the German brands are really stepping on the gas. Here they have increased their sales by 29 per cent over and above the previous year. The fact that the new Passat, which was developed especially for the US market and is being built in Volkswagen’s Chattanooga plant, scooped the renowned "Car of the Year 2012” award (presented by the US magazine "Motor Trend”) from a standing start, speaks in favor of the high product quality found in German cars that are "made in the USA.”
Campaign in small car segment, too
In the small car segment, which now accounts for 38 per cent of the whole car sector, the German brands are in a good position. Their market share in this segment increased again last year to 11.4 per cent (cf.: 10.7 per cent in the previous year). In total, over 263,000 small cars from German makers were sold in the US, a rise of 20 per cent relative to the previous year. So one third of German cars sold in the US in 2011 was in the small car category.
Sales of light trucks up by 36 per cent
We are progressing with impressive speed in light trucks. In 2011 the German OEMs increased their US sales of light trucks by 36 per cent to approximately 290,000 units, thus pushing up their market share in this segment by 0.8 percentage points to 4.4 percent. The overall light truck market has expanded by a good 12 per cent to 6.6 million units. So we have grown three times as fast as the whole light truck market.
One reason for this success is that in light trucks the German manufacturers have a large number of models especially in that segment whose share among the total registrations has doubled in the last six years, to around 25 per cent (24.5% in 2011; 13% in 2005): the Cross Utility Vehicles (CUVs). The German score points here with their attractive and fuel-efficient models, an increasingly number of which are offered both as clean diesels and as hybrids, such as the Audi Q7 TDI, the BMW X5 xDrive35d, the BMW ActiveHybrid X6, the Mercedes-Benz ML 350 Bluetec, and GL 350 Bluetec, the Porsche Cayenne S Hybrid and the Volkswagen Touareg 3.0 TDI. Alongside the pickup segment, the growth in CUVs has ensured that light trucks expanded their share of all light vehicle sales to 52 per cent last year (51 per cent in 2010).
German manufacturers’ clean diesel campaign
Any motorist who wishes to combine a long operating range with the lowest consumption and lowest CO2 emissions, at the same time attaching importance to comfort, torque and appropriate motorization, will not be able to avoid the clean diesel.
For example, in a recent study Deutsche Bank Research ("US auto market returning to previous size”, Dec. 2011) concluded that owing to the long distances in the US the clean diesel is the ideal choice for many customers. The average annual mileage per car in the US is around 16,000 km (10,000 miles) – one third higher than in Germany (12,000 km).
For a long time now clean diesels have been very popular with US automotive experts. In 2009 (VW’s Jetta TDI) and 2010 (Audi’s A3 TDI) German clean diesel models already won the highly regarded "Green Car of the Year” award, and more models from German makers (the BMW 335d, the VW Golf TDI and the VW Passat TDI) were among the top five finalists.
The US administration has also recognized the CO2 efficiency of this type of powertrain. in the summer of 2011 US Secretary of Transportation Ray LaHood was already emphasizing that the US could save 1.4 million barrels of oil every day if one third of all cars were fitted with clean diesel powertrains.
Clean diesels have such low (classical) pollutant emissions that they meet the strict limit values in all 50 federal states, even in California (AdBlue and SCR). More and more motorists in the United States are convinced of the advantages of the clean diesel. It is 25 percent more economical than a comparable gasoline vehicle. And "less fuel consumption” also means that even if a gallon of diesel (at USD 3.90) costs somewhat more at present at a gas station here in the United States than gasoline (at USD 3.30), this is more than compensated for because clean diesel vehicles manage more miles per gallon.
And there is another advantage. No matter whether you’re considering premium passenger cars or premium light trucks: today a modern six-cylinder clean diesel from a German manufacturer is as powerful as a V8 gasoline model and as economical as a four-cylinder gasoline model. No other powertrain has a greater operating range: on a full tank a German medium segment car can travel over 700 miles on the US highways, and a CUV or premium car covers a distance of at least 550 miles that depends on the model.
The US market is reacting. For instance, in 2011 sales of diesel passenger cars rose by 34 per cent. The market share of diesel cars in the US has been climbing continuously since 2008. The market share of diesel light trucks has been climbing since 2009; last year alone sales of diesel light trucks rose by almost one quarter.
At this time the share of diesels among all light vehicle sales is low – in 2011 it increased by 0.4 percentage points to 2.6 per cent. We are sure that the clean diesel will continue to expand its share in the coming years. Whether Audi, BMW, Mercedes-Benz or Volkswagen: all of them have attractive clean diesel models on offer, both as passenger cars and as light trucks.
The German manufacturers are world leaders in clean diesel technology. Half of all new cars registered in Western Europe are diesels – and half of the diesels in Western Europe are from a German group brand.
In the US one third of diesel-powered light vehicles (33.5 per cent) that are newly registered bear a German badge (market share in 2010: 28.7 percent). The German OEMs have pushed up their sales of clean diesel light vehicles by 40 per cent to around 111,000 units.
For years now the German manufacturers have taken 100 per cent of the market for diesel passenger cars. Sales increased by 34 per cent to more than 75,000 units in 2011 – so the growth was all to the benefit of the German makes. The range of clean diesel passenger car models from German brands is being continuously expanded. They occupy not only the luxury segment, but increasingly the compact and medium segments also. This model campaign will continue to exert its effects during the current year. Already one in eight diesel light trucks comes from a German brand. Last year our manufacturers increased their sales of clean diesel light trucks by 50 per cent!
Successful two-pillar strategy: local exports and local assembly both increased
The two-pillar strategy that our manufacturers are pursuing on the US market, of increasing both exports from Germany and local assembly here in the US, is paying off: For example, US sales of vehicles produced within NAFTA (the US, Canada and Mexico) have risen strongly, and imports from Europe to the US have also gone up. Step by step, the German automotive industry is therefore also becoming more independent of currency fluctuations. At the same time, this development underscores the major importance of North America in the global production network and as an export hub.
Last year the German manufacturers built a total of around 1 million light vehicles in the NAFTA region, which is a rise of 40 per cent over 2010. It means that one in seven new cars assembled abroad by German manufacturers rolled off production lines in the NAFTA countries. The majority of these vehicles were exported; just over one third were sold in the US.
In the US alone, the German OEMs raised their production in 2011 by nearly two thirds to 466,000 light vehicles. In addition to VW’s new plant in Chattanooga, Tennessee, this was also due in part to the BMW site in Spartanburg, South Carolina, and to the Mercedes-Benz plant in Tuscaloosa, Alabama. A large proportion of these vehicles, too, is destined for other markets, including Europe. This points up the significance of the US in the German manufacturers’ worldwide production network.
In 2011 the German vehicle-makers pushed up their exports from home production to the US by 4 per cent to 540,000 passenger cars. In addition there are just over 100,000 vehicles that were produced at sites outside NAFTA and likewise exported to the US. Receiving 12 per cent of all German car exports, the United States is one of the three most important export partners for the German automotive manufacturers (after the UK and China). In terms of value, exports to the US actually come in first place for the German manufacturers (at around 14 billion euro).
One out of six employees works at a German manufacturer
The German manufacturers employ roughly 29,000 people at their plants in the US. Compared with last year this represents a rise of 4,000. So one out of every six employees working for a vehicle manufacturer in the US is employed by a German brand. In the NAFTA region – i.e. including Canada and Mexico – German manufacturers employ a total workforce of 52,000, which is a rise of 6,000. The number of employees at German supply companies in the US has increased by 8,000 to 60,000 – which is one seventh of all employees working at suppliers in the United States.
More good opportunities in 2012
We expect that the automotive year 2012 will be another successful one for the German OEMs here in the US. The right conditions exist for further growth: we will expand our capacities, launch new and exciting models onto the market, and aim to increase our market share once again this year. Given the correct framework conditions, it should be possible to achieve this goal.”