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Emerging Markets Fuel Recovery For Luxury-Car Makers

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merging Markets Fuel Recovery For Luxury-Car Makers

By CHRISTOPH RAUWALD

FRANKFURT—Soaring demand in China, Brazil and India helped the world’s three largest luxury-car makers eke out sales gains last month, the latest sign that a recovery in the premium segment is gaining traction.

BMW AG’s core brand recorded its first year-to-year sales increase this year, with a 0.4% increase last month to 95,859 cars. The world’s largest premium auto maker by sales posted a 15% drop for the first 10 months of the year to 873,318 cars.

Demand for cars contracted sharply at the end of last year as credit markets dried up and consumer confidence waned in the economic downturn. As a result, most auto makers will shows sales improvements in coming months.

Sales in China jumped 81% to 9,558 cars. Sales rose 56% in India to 343 cars and more than doubled in Brazil to 838 vehicles. The Munich-based company by last month had surpassed sales for all of last year in the three countries.

Those three markets plus Russia will be crucial for growth in the auto industry in coming years, and companies are pushing hard to increase their presence in the so-called BRIC markets.

Thanks mainly to its strong presence in China, Audi AG, the premium division of Volkswagen AG, achieved a 0.4% sales increase last month to 82,750 cars. Sales for the year through October period fell 6.7% from a year earlier to 787,900 cars.

Audi expects to significantly exceed its initial target of 130,000 car sales in China this year and predicts the country will trump the company’s home turf of Germany as the company largest single market in 2012 or 2013. Annual sales in China are expected to soar to 250,000 cars by then as Audi increases local production and expands its dealership network.

Peter Schwarzenbauer, Audi’s executive-board member responsible for sales and marketing, said the company forecasts Russian sales at about 30,000 cars in 2015 from 16,000 this year. Russia had appeared on track to surpass Germany as Europe’s largest single car market, but demand collapsed when the financial crisis hit. Russia’s economy is recovering far more slowly than those of other BRIC nations.

Mr. Schwarzenbauer said he expects the broad Indian market to exceed three million vehicles in 2015 from roughly 1.3 million vehicles a year now. Audi’s sales in India are on track to come in at 1,650 cars this year and poised to rise to more than 2,000 next year, Mr. Schwarzenbauer said. He said the number of potential luxury-car buyers in India is growing, but infrastructure and road-quality problems still present obstacles.

Mr. Schwarzenbauer forecast Audi’s Brazil sales at around 2,300 cars this year. Brazil sales could reach 5,000 cars in 2013, two years earlier than expected. He said Audi’s brand image in Brazil is still focused on the entry-level A3 hatchback but that efforts to improve awareness of the company’s entire lineup continue.

Daimler AG on Friday reported a 7.2% rise in sales for its core Mercedes-Benz brand to 88,400 cars. China sales rose 78% to 6,600 cars.

China has become the biggest market for the flagship Mercedes-Benz S-Class sedan. Mercedes-Benz’s global sales fell 14% for the year through October to 826,000 cars.

www.online.wsj.com

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