Demand from the US and China is Keeping German Luxury Carmakers Busy

The picture is not very rosy in Europe right now, as several countries continue to struggle with high levels of debt, while austerity measures have been implemented in others. In Germany things are equally glum, particularly in the luxury goods and services sector. Domestic demand for premium cars has dropped more than 25 percent compared to a year ago. However, strong demand for luxury cars in the US and China is keeping premium carmakers like Audi, BMW and Mercedes-Benz busy during the holiday season.

"2010 was expected to be a tough year all round. But rich China sales have leapt (and) foreign exchange has been very supportive," said John Lawson, a London-based analyst at Citi Investment Research, in a recent Detroit News article.

Things are also starting to look better on the old continent, as "consumer interest in upscale cars in Europe has revived, to boot,” according to Lawson. Car sales in Germany totaled 2.7 million in the first 11 month of this year, but with demand rising in other countries, the German carmakers' association forecasts output would rise this year 11 percent to 5.5 million vehicles.

Germany’s luxury car exports are up, especially to the United States, China and Brazil. According to results compiled by Autodata Corp in the US, the premium car market has seen an overall growth of 11.1 percent in 2010, with BMW sales up by 11.6 percent, Mercedes-Benz by 18.6 percent and Audi by a whopping 23.6 percent. Things look even better in China, as nine of the top ten best selling luxury car brands are German and the market has grown around 40 percent in 2010.

So while auto workers in Germany might be a bit upset about shorter traditional holidays, they can at least have better job security.