BMW expecting Mercedes to be top seller during early 2012

BMW is easily on pace to dethrone Lexus as the United State’s best-selling luxury brand by year’s end, but the German automaker says it expects to lose that title in early 2012.

That threat won’t come from a resurgent Lexus but rather from cross-country rival Mercedes-Benz, the automaker’s U.S. head told the Detroit Free Press. BMW currently holds a 5,182 unit sales lead over Mercedes-Benz.

Although BMW’s Jim O’Donnell expects the brand to end 2012 as the U.S.’ favorite luxury brand, the executive concedes that a fresher lineup will give Mercedes the early lead in 2012.

“In the first quarter of next year, I would say Mercedes” will be No. 1, he said. “Mercedes going into 2012 in the first quarter will be in a strong position. Over the course of the year, we still should be ahead of Mercedes.”

Mercedes will be launching a freshened version of its C-Class later this year, which will likely outsell BMW’s aging 3-Series. However, BMW will launch its next-generation 3-Series in April 2012, which should move the automaker back to the top spot by the end of 2012.

Monday, Aug 22nd, 2011 @ 6:24 pm

By Drew Johnson

Used Car Prices Close the Gap on New

According to economist Paul Ballew, the slump in new car sales brought about by the GFC followed by reductions in the production of new cars, has culminated in the current shortage of used cars on the market.

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The news is good for manufacturers. Industry estimates suggest that by mid-2012, as many as 500,000 new vehicles will be sold to customers who would otherwise have opted for a used car.

In particular, record-high prices for luxury cars have led to more new cars being purchased. For example, a 2011 3-Series only costs $34 a month more to finance than a one-year old example.

“There’s a substitution effect going on between new and used,” says Ballew. “When you get those price gaps closing, you get people that are willing to shop new that wouldn’t have before.”

The effect is already being shown in increased demand for new luxury cars withBMW sales rising 13 percent in July, while Mercedes sales increased 7.3 percent.Ford also forecasts a 10 percent increase in new sales over the year.

If the trend continues, it is inevitable that with falling demand for used cars that sellers will drop their prices. However, an Edmunds analyst Joe Spina believes that there won’t be any dramatic decreases in used car prices for at least 18 months.