The premium car market is plummeting – not just here in South Africa, but also in Europe. Local sales are down 20% to date this year, while European sales of premium large cars declined by 13% in the first quarter of 2019.
The decline in the premium car market has had dire consequences. Earlier this year, BMW’s automotive division reported a loss for the first time in a decade. Meanwhile, Philippe Houchois, managing director of financial services company the Jefferies Group, has predicted that this decline could threaten the business models of BMW, Mercedes-Benz and Audi.
“Sales of premium cars probably have peaked globally. The premium business model as we have seen it, of model proliferation and people paying more because of the social status of those cars, is probably reaching a peak,” Houchois told the recent Automotive News Europe Congress in Gothenburg, Sweden.
But one premium carmaker is bucking this trend. According to Greg Maruszewski, Managing Director of Volvo Car South Africa, the Swedish carmaker is showing strong sales. “Despite the fact that the local premium car market is down 16% YTD (May), Volvo Car South Africa is gaining. In fact, sales have grown by 17.5% YTD (May) in South Africa,” he reveals.
Volvo Car South Africa has also grown its segment share – it is 5.5% on a year-to-date basis in 2019 versus 3.9% over the same period in 2018.
Global Volvo sales are impressive too. “Volvo Cars posted strong sales in May, with volumes up 12.4% compared with the same period last year. The company sold 60 196 cars last month,” reveals Maruszewski.
The success of Volvo – on both a local and global basis – can be attributed to the popularity of the XC models within its range. On a local front, the top-selling models are the XC40, XC60 and XC90. While the XC40 and XC90 have remained popular, sales of the XC60 have soared.
The XC60 is also the top-selling model internationally. “Globally, the XC60 was the top-selling model with sales reaching 17 510 cars (2018: 16 171), followed by the XC40, with total sales at 10 574 cars (2018: 5 413 units), and the Volvo XC90 at 8 621 cars (2018: 7 979 units),” concludes Maruszewski.