The harder they fall, the higher they bounce. Sales of premium cars and SUVs fell more steeply than “volume” brands after the financial crisis. Globally, the former’s share of the light vehicle market shrank from 8.3 per cent to 7.6 per cent between 2008 and 2009, according to LMC Automotive. Now, though, this end of the market is enjoying a faster recovery. Its sales are expected to be up about 11 per cent this year and about 6 to 8 per cent in 2012 – compared with gains of 4 to 5 per cent for the market generally. That is welcome news for German automakers such as BMW, which yesterday posted best-ever sales in 2011, up 14.2 per cent at 1.67m vehicles.

There are good reasons for thinking this market trend will continue. While the phenomenal growth in Chinese car demand over the past decade may be cooling, the country’s appetite for premium vehicles still appears to be expanding at very healthy rates. More than 970,000 top-end vehicles are thought to have been sold there in 2011 (15 per cent of the premium market globally), up from under 700,000 in 2010. That figure could exceed 1.1m in 2012 (a decade ago, it was little more than 30,000). Russia, although a much smaller market, is also hot. And US demand is recovering nicely.

As with the car market generally, the big worry is Europe, where sales of premium vehicles will probably dip in 2012. There is also the issue of incentives in the US, with signs that German brand manufacturers such as BMW, Porsche and Daimler began to increase these in the second half of 2011. Conversely, though, any further weakening of the euro against the dollar or the renminbi has to be helpful. BMW shares are trading at about 7.5 times forecast 2012 earnings, compared with about 4 times for Renault and PSA Peugeot. But, on this occasion, premium product deserves a premium rating.