In the first quarter, premium lower medium models broke through the 10% segment share barrier for the first time (see chart). However, the biggest surge came from upper medium, where premium brands took 47% in the month of March and 42% in the first quarter as a whole – an increase of six percentage points over the corresponding periods of 2005.
A couple of years ago, the BMW 3-series finally overtook the Ford Mondeo and now it seems only a matter of a year or so before compact executive models as a whole take a bigger share of the market than volume models.
Upper medium will then have fallen from being the biggest segment in the Seventies to fourth biggest – or, if off-roaders continue to grow, fifth biggest.
On the subject of off-roaders, the same ‘flight to premium’ was in evidence with premium penetration for the quarter up five points at 40%.
It is the same story in the final segment in which premium and volume models compete: sports cars. Premium brands took 53% of the segment (up 1.5%).
Overall, the two most successful segments have been city cars and off-roaders, two segments diametrically opposed to each other. City cars took 4.8% of the market in the first quarter compared to 3.8% in the same period last year.
As for off-roaders, the segment is proving increasingly attractive as customers get around the issue of fuel consumption by the simple expedient of buying diesel versions (now 73% of all off-roaders). The biggest winner was Land Rover, thanks to the Range Rover Sport, but there should be a mention of SsangYong who increased 4x4 sales by 44.6% in the quarter.
Other significant models include the Mercedes CLS which sold just over 1,000 units in the quarter.
A mention also goes to Chrysler for the 300C – the big Chrysler shifted 716 units in the quarter – making it the only non-premium executive model to have any impact.
Finally to the wooden spoon. The segment that lost most share was Lower Medium (down 1% at 34%), and it will lose plenty more yet. The segment boomed with the new Astra, Focus and Golf in 2005, but now the new product activity is being concentrated in the super-mini sector, and that will be the big growth area over the next year.
The Chrysler 300C is the only non-premium executive model to have made an impact
Premium brands share, 2005-2006
All segments saw a significant rise in premium penetration. Executive segment is not shown as premium penetration is now more than 90%.
In fact, premium share fell from 98.5% to 95.0% thanks to the Chrysler 300C, but that is unlikely to worry BMW and Audi unduly.