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BMW & Mercedes – Will Shorten Christmas Breaks Due To Increasing Demand

Mercedes E Classe

It looks like the employees over at BMW and Mercedes will have less time away from work, because the demands for new models is increasing, which means that the company will have to maintain the manufacturing numbers in order to keep up with this growing demand.

The BMW factories in Leipzig and Dingolfing will be rolling out cars over the holidays, in comparison to the three week break that they took in 2009 when sales were very bad. The Dingolfing factory unit is the place where the new generation of the 5-series sedan is produced. At the Leipzig, BMW is making the X1 crossover, which is a hit in terms of sales, ever since it was introduced in 2009.

Also working on the holidays is the Mercedes factory in Hamburg, where the supply various parts for the E-Class and S-Class sedans.

The request for luxury cars is recuperating after the financial and economical crisis, especially in the United States and in China where the economy is booming. Both Mercedes and BMW are aiming towards a 10% increase in sales this year. Audi, who is the luxury unit of Volkswagen AG, is planning on adding extra shifts in December in order to keep up with the increasing number of orders.

According to Juergen Pieper, who is an analyst with Bankhaus Metzler, “this is the first strong signal that the boom over the last few months can continue into next year”. Himanshu Patel, who is an analyst at JP Morgan Securities LLC, based in New York, recently told Monday in a report about Johnson Controls Inc. that this shortened holiday for the employees over at BMW and Mercedes means that the German luxury carmakers are gaining back the share they have lost in the last 2-3 years. Patel wrote in the report that JCI generates approximately 50% of its auto-parts revenue in Europe, where the automobile production in the last quarter of 2010 will be even higher than what analysts predicted.

This increasing demand for luxury vehicles allows the investment banks to reward workers with various promotions as they recover from the last 2-3 years of economical and financial halt. Goldman Sachs Group, which is the most profitable securities company in all Wall Street history, promoted many employees to managing director, increasing their salary and status. The world’s largest luxury-car market is in the United States.

BMW 7-Series

BMW, besides its own cars, is manufacturing Rolls Royce and Mini models; and increased its sells throughout the entire world by 13%, reaching 1.19 million until October. Mercedes and Smart sales went up by 12%, reaching 1.04 million in the same period.

BMW is manufacturing the 5, 6 and 7-Series at the Dingolfing factory which is the company’s largest unit. In Leipzig, BMW is producing the X1 model which was introduced last year, as well as the 1-Series compact.

According to Michael Rebstock, who is a spokesman at BMW, “production capacity is the limiting factor at the moment. We are producing as much as we can and are happy for every additional shift we can get.”

Rebstock also said that some of the BMW production plants will stop production around Christmas and New Year’s holidays in order to carry out the necessary maintenance and to restock the supplies. They are hoping to keep the breaks as short as possible, in comparison to last year when they prolonged the breaks.

According to Nicole Kicherer, who is a spokeswoman for Daimler in Stuttgart, Germany; the Hamburg plant will remain in operation through the holidays. The plant is manufacturing steering columns, axles and exhaust systems. Nicole said that most of the automobile factories will stop the production between Christmas Eve and New Year’s Day, which in comparison to last year, would be one to two weeks shorter.

Porsche AG has no such plants of shortening the Christmas break. The Audi plants in Neckarsulm and Ingolstadt will be closed between December 23rd and January 7th for performing the end-of-year maintenance routines, according to Audi’s spokesman for the works council, Ralf Matters. He also said that although the Christmas break will not be shortened, Audi will add shifts on Saturday and overnight from Sundays to Mondays in December in order “to cope with record orders”. At the Brussels plant where Audi makes the A1 compact, production will be resumed on January 3rd.

Porsche’s spokesman Heiner von der Laden recently said that the plant in Zuffenhausen will be closed from December 24th to 31st. The Leipzig assembly plant where the Panamera sedan and the Cayenne sport utility vehicles are assembled will be closed from December 24th to January 9th. Porsche has no plans of adding shifts to increase production.


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