Thanks to its wildly popular 3 Series, in August, BMW (NASDAQOTH: BAMXF ) saw its brand sales surge 45.7% compared with the same time last year. Even better? The 3 Series dominated sales compared with Daimler's (NASDAQOTH: DDAIF ) Mercedes-Benz C-class. Plus, since Sept. 1, 2010, BMW's stock has risen 69.17%. Here's what else you need to know.
Luxury brand power
On Sept. 4, BMW reported its August sales results, and they're impressive:
- 6,835 3 Series, a 66.9% increase.
- 4,359 5 Series, a 158.2% increase.
- 924 7 Series, a 172.6% increase.
Moreover, year-to-date, BMW brand sales came in at 188,997, compared with 164,636 through this time last year. That's a 14.8% increase. Further, BMW states, "Sales of BMW brand vehicles increased 45.7 percent in August for a total of 24,523 compared to 16,835 vehicles sold in August 2012."
Mercedes, on the other hand, saw its eighth record-breaking month of 2013, with units sold coming in at 27,144. However, while that's more than BMW's units sold, it's an increase of only 15.8% -- still great, but nowhere near BMW's jump. Moreover, the C-Class came in at 6,701 units sold, up 2.8%, but still significantly less than BMW's 3 Series.
What's driving sales?
Both the C-Class and 3 Series compete in the compact luxury sport sedan segment, and both are powered by four-cylinder turbocharged engines in their entry-level versions. However, for their entry-level versions, the C250 uses a 1.8-liter turbocharged, direct-injected four-cylinder engine with 201 horsepower and 229 pound-feet of torque, while the 320i has a 2.0-liter turbocharged, direct-injected engine, with 180 horsepower and 200 pound-feet of torque.
For miles per gallon, Mercedes' C-Class comes in at 22/31 mpg, while the 3 Series gets 24/36 mpg. Further, the C-Class has a starting MSRP of $38,200, while the 3 Series has a starting MSRP of $32,550.
Besides that, the two vehicles are similar in terms of consumer ratings, safety rating, and reliability, according to Edmunds. So, what could be driving sales is a lower cost of entry: The BMW is cheaper -- although if you compare the C300 with the 328I, that price difference is negligible.
Sales in the future
Last year, Mercedes took home the title of best-selling luxury brand in America -- the world's top luxury-car market. But this year, BMW is expected to claim that title. Another factor investors should consider is China, whose premium-car market has increased by a compounded annual rate of 36% in the past decade. In fact, China's luxury auto segment is expected to climb 7% to 12% this year, which is great news for luxury-car makers. More pointedly, in 2012, BMW had a 23.6% luxury market share, which was second only to Volkswagen's (NASDAQOTH: VLKAY ) Audi market share of 29.6%. These numbers show that BMW is in a prime position to capitalize on China's auto market, which is great news for investors. As such, BMW could make a great investment.
Profit from the Chinese auto market
Volkswagen's Audi sales are surging in China, and in fact, Audi's the most popular luxury brand, there! There's good reason to believe that the most successful investors over the next few decades will be those with exposure to China's massive and growing population of domestic consumers. In our brand-new free report, our analysts get out in front of this trend by identifying two automakers, including Volkswagen, that are poised to surge along with China's middle class. If you want to be among the smart investors who get rich from this growing trend, then you'd be well advised to instantly download our free report on the topic by clicking here now.