If you talk about the luxury brands globally, you can't ignore the trio of BMW, Mercedes-Benz and Audi, also known as the German Big Three. The Majority of the luxury car sales around the globe, or in India, is captured by these big three and they fight neck to neck to achieve the global dominance year after year. But the battle to achieve the best doesn't end at the sales numbers and global expansion, it goes beyond.
But how do one out-perform each other, other than the sales? Well, one way is to create a sub-brand, so strong that can improve the brand image of a company. And that is why these German automakers are constantly trying to out-engineer one another with their high-performance sub-brands. And what do the customers get out of it? They get the horsepower supremacy, breakneck acceleration and leading-edge technology.
So why doesn't everyone go for these high-end performance cars? The obvious reason is the premium you have to pay in order to get the desired performance out of these machines. Most of the high-performance cars are basically super-powered variants of regular premium cars and SUVs. The global sales of these three brands are touching about a lakh units combined.
And how much does one have to shell out for such performance? On average, the buyers will shell out approximately $125,000 to 175,000 for such vehicles and analysts say that the margins earned on the models are significant. "We want to over-proportionally contribute to Mercedes' profitability, that means we have a higher return than normal Mercedes models," former AMG CEO Ola Kaellenius once said.
AMG was founded in 1967 and is oldest of the lot. Mercedes too the controlling stake of the 51 percent stake in AMG in 1999 then took full ownership in 2005. Before 1999, AMG was independently tuning high end cars. "This magical combination of the three-pointed star with these three letters makes AMG the performance brand that people desire and want to have," Kaellenius said.
AMG accounts for almost 2% global sales of Mercedes-Benz cars and aims to grow. AMG celebrated its 45th anniversary in 2012 and announced an ambitious strategy for the next five years: increase unit sales to 30,000 by 2017 from about 20,000 last year. To expand the model range to 30 by its 50th anniversary in 2017 from 22 units in 2013.
Of the three brands, AMG's range is the widest and most famous. The United States is AMG's biggest market, followed by Western Europe, which is led by the home country, Germany, and then Japan. In addition, relatively new markets such as China have grown faster in the last 10 years.
Some of the models under the AMG includes AMG GT, CLA 45 AMG, ML 63 AMG, S63 AMG.
Now this is a confusing badging. The actual performance division of Audi is Quattro, the same name which they use in their gearbox. Due to this, they chose to use the RS badge on the high-performance variants, which otherwise is not a sub-brand. Unlike others, RS is relatively a new brand as it was only started in 1983 and introduced to the outside world in 2011, as Audi only provided this badging in European countries until 2011.
"We are well known and pretty famous in Germany and in the rest of Europe, so our biggest challenge is overseas expansion, with a big growth potential in the U.S. and in China, as well as in the Middle East and Russia," Quattro Managing Director Franciscus Van once said.
Audi RS is also the least in model numbers, with only 9 cars launched till 2013. A relatively new brand with only a limited number of vehicles and limited presence has left Audi lagging behind. Audi is now using a racing platform like the other two rivals to enhance the RS visibility. That is why they are racing in China, Korea and Taiwan to boost Quattro's global brand recognition.
Some of the models under the RS badging includes the Audi RS7, Audi RS5, TT RS and RS4 Avant.
While the AMG might be the most famous and diversified brand, M-series is definitely the fastest. M-Series was formed in 1972 as a special Motorsports division. M-Series for a decade now, is using ultra-light carbon fiber, used for the entire body shell in some of the recent vehicles. "BMW is a sporty brand and M is the sporty edge of BMW," Friedrich Nitschke, president of BMW M GmbH said.
BMW Motors like Mercedes-Benz, has recently provided an M-Badge to almost every vehicle except the &-series sedan. While the Mercedes AMG uses fully automatic gearboxes, BMW M-Series uses manual and semi-automatic gearbox for more driver-vehicle interaction. Infact, M-series are tested and tuned at the BMW's private facility in Nurburgring racing circuit in Germany.
Some of the models under the M-Series badge are BMW M3, BMW M4, BMW M5 and BMW M6.
Image Source: Car and Driver