Mercedes, BMW, Audi rely on China for luxury car sales as Germany slows

Bayerische Motoren Werke AG, the world’s largest luxury carmaker, Volkswagen AG’s Audi unit and Daimler AG are countering sales at home by selling more cars in China even as industry-wide demand cools in the world’s largest auto market.

Audi sold 53 percent more cars in China in July compared with a year earlier, while Daimler, the world’s second-largest luxury-car maker, tripled sales of its Mercedes-Benz brand to 14,500 vehicles and BMW raised is deliveries 82 percent to 13,852, the companies said this month. Sales of Audi and Mercedes fell in Germany for the month, while BMW sales increased 4 percent.

Demand for upscale cars in China may outstrip the overall car market during 2010 as a growing number of wealthy Chinese boosts sales. Research group J.D. Power & Associates estimates sales of luxury vehicles in the nation will rise at almost double the industry pace of 20 percent to 530,000 units this year and reach 1.1 million by 2015.

“Limited competition, very strong growth and a willingness to spend money. That combination is just explosive,” said Michael Dunne, president of automotive research firm Dunne & Co. Rich Chinese are “declaring their success to their friends, family and colleagues with what kind of car they are driving,” he said.

Sales in China are helping the German automakers increase profit even as car sales rose just 0.6 percent in Europe during the first six months of the years, their most important region by deliveries.

Vehicle registrations in Germany fell 30 percent in July, according to figures from the Federal Motor Vehicle Office in Flensburg.

Volkswagen reported the biggest quarterly profit in two years on July 29 in part because of demand in China for Audi models.