Germany’s Luxury Big Three Still Profitable

On the other end this year’s pot may be smaller, but it still has gold.

By Gunnar Heinrich | IMG of Dresden via Der Spiegel

MOTOWN’S losing billion$.

That’s all that we who’ve been watching Detroit’s incredible collapse have been consuming for the past three weeks. The continuously negative news cycle that drums the dark warnings that one or all of the Big Three – GM, Ford, Chrysler – won’t make through 2009 is a real downer, to be mild.

Considering that the domestic and international economies are said to be in rough shape – though you wouldn’t know it for the abundance of mall shoppers, theater goers, dinning-out’ers – the upwardly mobile are reportedly not charging, leasing, or financing with quite the same frequency these days.

C’est dommage, but how’s the Big Three of the luxury car market – Mercedes-Benz, BMW, Audi – doing in these “uncertain times?”

Nicely, thank you.

Though, not as well as they’d like and the reasons for their profit retraction are everything to do with a financial market in flames and nothing to do with their own Teutonic efficiency. Of the three corporate press releases outlying how Q3 went, Audi was the most upbeat, while Mercedes-Benz seemed the most negative.

Still, everybody’s numbers were in the black.

Audi: Audi Group vehicles remained very popular during the period January through September 2008 [...] Despite increasingly difficult market conditions, sales of Audi brand vehicles continues to rise, climbing by 2.9 percent to a new record high of 762,289 units [...] The company achieved a growth rate well into double figures in China (incl. Hong Kong).

BMW: The performance of the BMW Group in the third quarter 2008 was perceptibly influenced by the economic downswing in the wake of the financial crisis. Ongoing consumer reticence in the main sales markets, the weak state of the used car markets as well as increasing refinancing costs had a substantial negative impact on the earnings of the BMW Group. However, they’re still in the black.
The third-quarter profit before financial result fell by 60.2 % to euro 387 million.

Mercedes-Benz: The worsening banking crisis, its effects on the real economy, and the resulting global consumer uncertainty had a negative impact on the business development of Daimler AG (stock-exchange abbreviation DAI) in the third quarter of this year. But… Net profit amounted to €213 million (Q3 2007: net loss of €1,533 million), equivalent to earnings per share of €0.21 (Q3 2007: loss per share of €1.47). The net loss of the prior-year quarter included special effects from the Chrysler transaction.

So, to summarize: the Germans are worried and they’ve suffered the fiscal set backs afflicting the rest of the industry. But they’re still managing a profit.

On the other hand, Quarter Three ended in September. The real $#!& didn’t start hitting the fan until October, so Q4′s math should be telling.