MOST EUROPEAN carmakers enjoyed growing sales in the USA last year, even though the total market was flat at 15.1 million units.
In 1998, Europeans expect further growth, helped by new models and a strong dollar.
Porsche, Mercedes-Benz and Audi showed the biggest increases. They rose 45 percent, 35 percent and 25 percent, respectively last year. Although Volkswagen's sales were up by only 1.5 percent over 1996, it has big ambitions for 1998.
Porsche cannot meet current demand in North America for the Boxster and the new 911. Porsche Chairman Wendelin Wiedeking forecast 20,000 sales this year, double the 1996 figure.
Other German carmakers remain ambitious after several years of growth. Mercedes-Benz has doubled its sales since 1993, and Volkswagen's have tripled. The VW Jetta (Vento) is now the most popular European model in the USA, with 90,984 sales in 1997.
Audi tripled its sales in three years. Both Audi and Volkswagen predict sales will rise a further 20 percent this year. Mercedes-Benz expects a rise of 15 percent.
'The new Beetle will play a vital role in our future,' said Steve Keyes, director of corporate communications at VW of America. 'But this year, the new Golf will hit the market, too, and the new Passat has had a warm reception. In 1999 we are convinced we will break the 200,000 barrier.'
Gerd Klauss, vice president of Audi of America, is equally optimistic, with 50,000 cars projected for 1999. 'But we must be careful on the financial side,' he said. The strong dollar has helped, 'but the fact that both we and Audi are in the black as far as US activities are concerned, is the result of cost reductions.'
The strong dollar means that cars imported from Germany cost less. However, Klauss said, some of the benefits of a strong dollar are offset by tougher price competition.
Competition in the premium segment is as intense as in volume markets, said Klauss. 'This segment counts for 1.2 million cars, and may go up slightly to 1.4 million.' Klaus said Audi had increased its prices by slightly more than its rivals, but the rivals say Audi has the sharpest pricing of all the German imports.
Seven years ago, importers thought a falling dollar was a catastrophe, said Henrich Heitmann, chairman of BMW (US) Holding Corp. 'In reality, it is not much higher now.'
The current favorable exchange rate has not directly helped BMW's market position, he said, 'but it allowed us to have sharper pricing.'
Thirty percent of the value of the US-built Mercedes M-class is imported from Europe, said Dieter Zetsche, Daimler-Benz's sales and marketing chief. 'So that doesn't balance the difference in exchange rates.'
About half the value of the dollar's rise has been hedged, said Zetsche. 'At the moment we are trading at about DM1.70 to the dollar, while the actual value is DM1.80-DM1.85, and was DM1.60 a few months ago.'
UK-based importers are not as optimistic as German companies, because the British pound has appreciated even more than the dollar. That has made Land Rovers and Jaguars relatively more expensive in the USA.
BMW-subsidiary Land Rover achieved record US sales last year, which were up 3 percent on 1996. But the company will be happy if it can maintain this level in 1998, especially since the Defender model will be withdrawn this year.
Jaguar will also be happy to maintain the level of 1997 sales. Jaguar North America's sales rose 9 percent last year, entirely due to the new XK8 sports car. 'When the smaller X200 arrives early in 1999 we expect real growth again,' said President Michael Dale.
Volvo's sales rose by 5.6 percent, despite slow deliveries of the C70 coupe and convertible, which had suffered quality problems. James Borch, director of corporate communications at Volvo of North America, forecast 1998 sales of 110,000.
'It partly depends on the availability of the new, large Volvo,' and the availability of the smaller S40 and V40 models built at NedCar in the Netherlands, he said.
Saab predicts 1998 sales of 35,000 cars this year with the new 9-5.
That would remain well below the 46,000-unit record of 1986.