MUNICH – Daimler AG's Mercedes-Benz division, BMW brand, Bentley, Rolls-Royce, Lamborghini and Land Rover made strong gains in European auto production in April.
One of the reasons premium carmakers were up is because of a comparison with a rough April 2009, when the combination of the global financial crisis and Europe's small-car-favoring scrapping incentives robbed them of customers.
As government subsidies wind down and economies around the world rebound, European factories are busy filling orders for high-end models such as the Mercedes S class – April output rose to 6,012 units from 675 in 2009 – Land Rover Range Rover Sport (up 157% year on year) and the all-new Rolls-Royce Ghost, according to estimates from J.D. Power Automotive Forecasting.
Overall, European production was up 8 percent in the month to 1,367,512 and 28 percent to 5,746,227 through April, J.D. Power data shows. April was the first month when the year-on-year production growth rate was less than double-digit percentage. (See table, bottom)
The slowing of the production growth rate is considered a warning of things to come as incentive programs, which artificially boosted demand last year, run out of cash. The UK's program ended March 31 while Germany's and Italy's subsidies wrapped up months ago leaving Spain and France as the last of the top 5 European markets with government-backed subsidies to help new-car sales.
Credit ratings agency Moody's said in a report last week that the German and Italian markets look particularly bleak due to the negative effect of the end of scrapping schemes. New-car sales in both markets were down by more than 16 percent last month, according to industry association ACEA.
Premium automakers such as Mercedes, BMW and Land Rover will be partially protected from declines in Europe by rising sales in United States, where each brand's April sales volume rose by 10 percent.