It was a tough first quarter for German luxury automakers Audi, Porsche, and Mercedes. There are a lot of reasons and we’ll look at those, but there’s one German automaker not sweating it: BMW. What’s the deal with BMW? Why is it suffering less? Let’s take a deeper look.
The National Transportation Safety Board is suddenly way more important these days as rail, aviation, and highway disasters seem to be piling up. There’s a nomination before the U.S. Senate for a new term for the current board chair and it’s a big deal.
Partially, it’s a big deal because the automotive industry is rapidly trying to make self-driving cars a thing. Tesla is in the lead in terms of emphasis, if not actual tech, and its enthusiasm for pretending like its cars can actually drive themselves has resulted in a rare legal settlement from the automaker.
There’s been a movement to restrict California from enforcing its EV rules, but the U.S. Court of Appeals says California can keep on keeping on.
Let’s dumpty dump like Shock G.
BMW Is The Surprising Outlier Among German Luxury Brands
I was chatting with Parker and some other car folks about design this morning and Parker brought up that he felt like we’re in a great period where a wide variety of automakers are creating interesting products people want (Defender, new 4Runner, Santa Cruz). The one automaker that was conspicuously not on his list was BMW.
There’s a bit of an enthusiast bias for/against BMW. It’s a company that has the benefit/burden of having such a great past that the present doesn’t always feel right. This is in spite of BMW making cars that are faster, safer, and nicer at the same time. There’s no stock BMW 2002 that wouldn’t get knee-dropped by a BMW X4 M Competition around Laguna Seca. Hell, an E30 M3 would probably lose that race.
Some of this is design. It’s polarizing. It’s distinct, but it’s not for everyone. All of this would leave an enthusiast with the impression that BMW is a doomed company. Far from it, BMW is doing quite well relative to its competitors so far this year.
Why? First of all, BMW still builds a ton of fantastic cars, both gas and EV. The BMW iX is a stellar electric crossover. I borrowed one and, though it wasn’t precisely to my taste, it’s impossible to ignore that it is a well-built and extremely comfortable car. The new BMW M2 is great. Of all the European automakers, I think BMW has the best EV lineup.
In Q1 of 2024, total sales were up 2.4% in the United States compared to Q2 of 2023, and BEV sales were up 62.6%, accounting for more than 12% of BMW’s total volume. Globally, the company is up 2.5% over the same period, with a 40.6% increase in BEV sales.
I don’t think the new BMW X2 is something I would buy, but it’s attractively priced (would you rather have that or a Hornet?) and I’m sure they’ll sell a ton of them.
BMW has exposure to China, where it’s down 3.8%, but there’s enough growth everywhere else to counteract that. It’s hard to say the same for the rest of Germany’s luxury automakers.
Porsche, percentage-wise, had a rough Q1 with deliveries down 4% globally, including a 24% drop in China. Given China’s economic uncertainty and demand woes that’s not a huge surprise, but what’s going on in North America? It seems like the Audi/VW/Porsche vehicles that were held in ports due to a non-compliant part were mostly Porsches. There’s a new EV Macan coming, which might help, plus that part issue has been resolved.
Mercedes also had a rough go of it in China, with a 13% drop in that country which contributed to an overall 6% decrease in sales in Q1 2024 for the company globally. Is all hope lost? Not quite. Mercedes-Benz is in the midst of a production rollout for the revised and locally-built LWB E-Class and U.S. sales were up slightly.
And then there’s Audi. I haven’t seen Audi Q1 global amounts released yet, but the picture is bleak in the United States where there was a 16% year-over-year drop. The company’s big volume Q5 was down 33% Y-O-Y, and the Q7 was down 35%. Electric cars were generally up, but they were also available.
Given that Audi CPO volume was up 66% I think some of this is likely due to the port issue as well, especially considering that Audi had a strong 2023. Globally this ain’t gonna help though.
In the end, BMW has a desirable product mix, a strong EV portfolio, and a little bit of good timing on its side. We’ll see in a quarter if everyone else catches back up or if BMW extends its lead.
The NTSB Chair Is An Important Person You Never Want To Meet
Like Harvey Keitel in “Pulp Fiction,” the chair of the National Transportation Safety Board is not someone who shows up when things are going well. It usually means a plane has crashed, a boat has hit a bridge, or a rail car full of noxious chemicals has overturned somewhere.
The NTSB’s current chair is Jennifer Homendy and she’s up for another term, which means she gets to appear before the Senate’s Commerce Committee.
David Shephardson has read her testimony and filed this report, which included this little bit:
“On scene, my most important duty is to brief the families on what is often the worst day of their lives. It’s why I fight so hard for NTSB safety recommendations,” Homendy will say, according to her written testimony pledging to continue serving “as a fierce advocate for improving transportation safety.”
It’s not a great gig, but someone has to do it, and so far I’ve appreciated Homendy’s tough stance on a number of issues. In particular, Homendy has pushed for advanced driver assistance systems like Tesla’s ‘Autopilot’ to be more closely scrutinized.
Tesla Settles Autopilot Lawsuit
It does sometimes feel like Tesla gets away with everything and wins every court case, especially since CEO Elon Musk bought Twitter and turned it into his own echo chamber, though that’s not reality.
In fact, Tesla settled a lawsuit this week with the family of engineer Walter Huant, who used his Model X’s ‘Autopilot’ system and felt comfortable enough with it that he was allegedly playing a video game when his car crashed into a barrier.
After dropping his son off at preschool, Huang activated the Autopilot feature on his Model X for his commute to his job at Apple. But less than 20 minutes later, Autopilot veered the vehicle out of its lane and began to accelerate before barreling into a barrier located at a perilous intersection on a busy highway in Mountain View, California. The Model X was still traveling at more than 70 miles per hour (110 kilometers per hour).
Huang, 38, died at the gruesome scene, leaving behind his wife and two children, now 12 and 9 years old.
Tesla said it settled the case to avoid years of litigation, but I do wonder if part of this doesn’t have to do with who was killed. This wasn’t a random person who was out drinking, as in a previous case. This was an Apple engineer en route to work in the morning.
It would have been difficult to paint Huang as a technological neophyte or an irresponsible person.
EPA Says California Can Keep Its EV Mandate
California has long been able to set its own emissions standards, largely because the state suffered so much from vehicle emissions in the 20th century. This includes setting the state’s first EV standards, which California rolled out in 1993.
Lately, the California Air Resources Board (CARB, get it?) pushed a plan to end all gasoline-only sales by 2035. Many other states follow California’s lead, so this was a de facto ICE ban for much of the country.
A collection of 17 Republican-led states opposed this idea and tried to sue, but the U.S. Court of Appeals said California has a right to do this.
From Reuters via Automotive News:
Ms. Homendy has done an admirable job at the NTSB, Biden should fire the feckless Buttigeig at the NHTSA and let her run that too.
Angel Olsen is dreamy, especially All the Good Times!
Except their design language looks like a sucking butt.
“Angel Olsen – Shut up and kiss me”
Well I wanted to kiss you as you’re pretty darn good looking. But then I heard you sing… and well… now I think I’ll take a pass on kissing you… ESPECIALLY if we have to kiss while rollerskating… which I’m terrible at.
LOL
“The Big Question”
I predict the Germans will neither crumble nor rebound. I predict they will ‘hang in there’
However… I believe this year, some of the more marginal Chinese car companies may start to crumble.
With that mole rat nose they don’t need to suck. They can move to full ingestion.
I am very particular about which new cars I’d buy, but less particular than I have been.
That being said, I cannot think of a traditional new automobile from Germany that I want.
The i3 has been gone for years (but some shark managed to snag a NOS one not too long ago), The ID Buzz when it eventually gets sold in the US will probably be stuck with CCS for way too long, and won’t be sold in any variant I would want, same for the e-Sprinter, etc.