German performance brand Mercedes-AMG is set to have its best sales year on record in Australia by the end of 2017, on the back of an ever-expanding range and our market’s continued desire to own high performance European vehicles.
Speaking to CarAdvice at the international launch of the GLC63 in Germany this week, the German brand’s head of communication, David McCarthy, said that 2017 will see sales records for the AMG brand though future outlook for the market in the coming years is now tougher than it has previously been.
“If the cars arrive and we get them through customs and everything in time, we should do 7000 units [of AMG] this year.” McCarthy said.
That represents roughly 40 per cent growth on the brand’s previous sales record. The growth in AMG vehicles is fuelled by the expanding range of cars that now include the ‘43’ variants such as the C43, E43 and GLC43 (below). The addition of the new E63 and E63 S has also seen an increase in volumes.
At the moment, for every four to five cars that Mercedes-Benz sells in Australia, at least one of them wears an AMG badge. This represents one of the highest penetration of AMG sales as a percentage of overall sales in the world. Even so, with economic and social challenges looming, Mercedes expects that growth curve to slow.
“Next year is going to be… the market is really tough, it’s very competitive. Our allocation problems are less of an issue than they were in the past because we are running 20-25 per cent in AMG and they recognise that, I think the market next year will be a lot tougher I don’t see as much growth, but there will still be growth.”
The growth trajectory that the brand has experienced this year will be harder to sustain, as the overall sales volume is now higher than ever. Mercedes-AMG seeks to maintain its volume in line with the overall growth of the brand.
“In terms of a figure for AMG, yes we want to do more but I think the level of growth as you are building off a higher base all the time [will be less], it’s important to look at the number rather than the percentage. We want to keep [percentage of sales] as much as we can at 20 per cent, if it drops a little bit and we are selling more cars overall, that’s fine.”
Above: Mercedes-AMG C63
The growth in AMG is also being fuelled by the development of specialised high-performance AMG centres, which the German brand feels will help further lift volume.
“Certainly those dealerships that have put a greater concentration on AMG, sell more AMG as a percentage. When the standalone dealership opens up in Sydney, that will do volume that most dealers would be happy to do across the board. Sydney is a big market.”
Although a great percentage of AMG buyers purchase their vehicles outright, there is a growth demanding of leasing packages that McCarthy says will see the brand look to provide better capped-priced servicing to make the process easier.
Even so, with a cooling economy, stricter lending criteria and potential decline in the housing market, the traditional methods of borrowing against property may affect the sale of high end vehicles such as AMGs.
“The banks are uneasy about people having too much debt in their equity package, not related to their property… It’s one of the reasons why the market is becoming tougher, plus we have had no appreciable increase in wages in the last couple of years, inflation is relatively low but people are not seeing more income and with other costs going up, it reduces their ability [to purchase new vehicles].”