22 October 2009
The BAM Effect
What is the BAM effect? Well, it stand for BMW, Audi and Mercedes Benz. Individually, they compete against each other, but collectively they put up a persuasive argument that buying a German brand executive car is the way to go. In the same way a tsunami wave persuades you to head for the hills. Now, apart from the BAM brands, the other premium marques that are sold widely are Volvo, Lexus and Jaguar/Land Rover (JLR). The latter come from differing countries and don't have that block effect to promote their nation as a maker of fine automobiles, in the way Germany does.
So I decided to compare the market share in 26 varied markets to see how the BAM effect works. The statistics used are for cars/SUVs and for year 2008. Some countries exclude certain models and include others, so it's not perfect. For Land Rover, I have included all 'excludes' so to speak, so the figures slightly favour JLR. However, it still gives a good picture overall. The percentages are what the BAM brands, and others individually, get in a given country. All their sales are combined which equals 100%, and then divided up between them to see what each individually gets. Now for the stats.
BAM are strongest in Germany (95%) , Portugal (90) , France (89) , Austria & Spain (88) , Greece (87), Italy (86), South Africa or RSA (84), Belgium (83) and Switzerland (81). The Bam trio do worst in Sweden (41%), Russia (49), Finland & The US (60).
Lexus does best in the US (28%), Japan (21), Korea & Canada (20). It fails miserably in Brazil, Germany & Italy (around 0.5), Finland, Belgium, Norway & Austria (less than 1%).
Volvo win in Sweden (58%), Finland (37) Norway (30) & the Netherlands (20). It loses out in Germany (3%), RSA (4) and NZ (5).
Finally, JLR score in Brazil (25%), Russia (20), UK (15) NZ (13) & Eire (11). They strike out in Sweden & Germany (1%), Portugal & Norway (2), Greece, Finland & Japan (2.5), France & Austria (3.5).
Three nations didn't get listed here as they are less extreme in their buying preferences. These were Romania (like JLR 10%), Australia (Lexus leaning for 11%), and Poland (keen on Volvo 18%).
When one looks at the chart as a whole, BAM brands dominate in Europe, Volvo are strong in Scandinavia, Lexus Asia and North America while for JLR it's in the emerging nations. The least international of these brands seems to be Lexus.
As the BAM marques widen their range and aggressively attack world markets, expect their share to rise in 2009. The others, competing individually will slip back.
The bottom line: The BAM effect - three brands form one nation in the premium segment - works.