If there is a healthy competition that spans the depths of automotive history, it is between Mercedes-Benz and BMW. It is impossible to talk about one house without mentioning the other. They are eternal rivals like Renault and Peugeot in France, Ferrari and Lamborghini in Italy, Ford and Chevrolet in the United States, or Toyota and Honda in Japan.
This friendly competition has resulted in important advances in performance, safety and design in the automotive industry. Mercedes is probably the best motivation to keep BMW going, and vice versa. Without this strong competition, the two German manufacturers would be in a more difficult situation, let alone hold the top spot in the premium car market. Competition is always a good thing.
Today, BMW and Mercedes-Benz are the most popular premium car brands in the world. Many motorists aspire to own something from these companies, and it shows in the sales statistics. Combined, they sold nearly 4.3 million vehicles in 2021, accounting for 40 percent of global premium and luxury vehicle sales.
BMW Grows Faster
While the two manufacturers have traditionally been very similar in terms of technology and innovation, a shift in that trend is beginning to emerge. For example, last year, BMW overtook Mercedes and became the world’s favorite premium car brand, thanks to a 9 percent increase compared to 2020 volume. In contrast, Mercedes-Benz (excluding Smart and vans), recorded a 5 percent decline.
BMW has benefited from increased demand for its most popular models, while the Stuttgart brand has suffered from the aging C-Class and E-Class. BMW increased its sales by volume in China, Europe, the United States and Japan-Korea, while Mercedes recorded declines in those four markets. The variance in sales for China and North America was significant, rising 8 percent and 21 percent, respectively, versus declines of 3 percent and 1 percent, respectively.
Aggressive Versus Conservative
Last year’s results are partly explained by the different strategies adopted by the two companies. Over the past decade, Mercedes has focused all its efforts on reducing the average age of its customer base. The introduction of the A-Class, CLA, CLS and the SUV lineup with coupe-derived versions was the result of this change. It seems that this is a choice that paid off, because today Mercedes is known not only for its luxurious and elegant sedans, but also for its sportier performance vehicles.
BMW has never had that problem. In contrast to the historical position of its competitors, Bimmers is increasingly being associated with performance in the premium segment. That is why there has been a slight change in strategy in recent years. Until now.
Based on the latest data, it seems that BMW is now taking a more aggressive approach while Mercedes is still pursuing a conservative path. Here are some clear examples of these emerging differences: the BMW iX, the second generation of the 4 Series, and the recently updated BMW 7 Series. They are like the atomic bomb on social media, generating all kinds of good or bad talk. Meanwhile, we’ve seen how the latest Mercedes models follow the concept of evolution versus revolution.
We don’t yet understand whether the change in approach will pay off for BMW or Mercedes, and what will happen to the global sales gap. This might be a major differentiator in the future, or it could be just another cycle for each of the two homes.
The author of the article, Felipe Munoz, is JATO dynamics Automotive Industry Specialist.