BMW, Mercedes Steer Through U.S. Slump With Made-in-America SUVs – Bloomberg

Posted: Friday, June 02, 2017

Fewer new Mercedes-Benz models are making their way to Fifth Avenue to be bemoaned by Donald Trump — and those that do are increasingly likely to have been built in the U.S.

BMW AG and Mercedes parent Daimler AG’s U.S. sales in May dropped 11 percent and 8.2 percent, respectively, the German automakers said Thursday. South Carolina and Alabama-assembled sport utility vehicles were exceptions to a month of weak total deliveries, with demand jumping for BMW X3 and Mercedes GLE models.

The results reveal a blind spot in Trump’s renewed rhetoric that German automakers sell too many vehicles in the U.S. For decades, BMW and Mercedes have been boons to the local economies of Republican-leaning states where they operate plants. Appetite for models built in those factories is growing both among American and overseas consumers, supporting U.S. exports.

“The U.S. is the biggest market for the SUVs that BMW and Mercedes sell, because that body style has been popular for years,” said Alan Baum, founder of West Bloomfield, Michigan-based researcher Baum & Associates. “Over time, it’s led to a lot of exports because those vehicles have become popular in Europe.”

U.S. deliveries of the Mercedes GLE jumped 16 percent last month, while BMW’s X3 SUV soared 22 percent. Despite its overall decline in May, Mercedes widened its U.S. sales lead over BMW to more than 15,000 vehicles.

Daimler shares rose 0.6 percent to 65.65 euros at 9:12 a.m. in Frankfurt trading, while BMW gained 0.7 percent to 85.64 euros.

Trump has blasted Germany’s trade surplus with the U.S. and taken direct shots at the nation’s auto industry. He reportedly told European Union officials in a closed-door meeting last week that there would be a stop put on the millions of vehicles German automakers sell in the U.S.

The Germans aren’t alone among foreign premium brands ranking well ahead of General Motors Co.’s Cadillac or Ford Motor Co.’s Lincoln in their home market. The third-biggest seller of luxury vehicles in the U.S., Toyota Motor Corp.’s Lexus, is falling further behind Mercedes and BMW. Rising demand for NX crossovers has failed to make up for plunging sedan deliveries.

Volkswagen AG’s Audi was the biggest luxury auto brand to report increasing sales last month. Deliveries rose 2.5 percent in May, driven by gains for the Q7 SUV and the A5 sedan.


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