GERMANY: BMW upbeat on China prospects
BMW is highlighting buoyant prospects in the Chinese market in what it concedes is a still tough global market environment.
Speaking to just-auto in Munich ahead of a press conference in Munich today (17 March) to present its annual results, the German automaker highlighted China where it sees significant breakthrough sales, although it cautioned that the massive growth would start to slow.
“China is explosive and we will burst through 100,000 cars we think relatively easily,” said BMW board member sales and marketing Ian Robertson.
“Potentially, in the next ten years it [China] will continue to be the largest car market in the world, hence we are building a second car plant and will add another 20+ dealers this year. What nobody knows in China is: will it continue with the pace it has been last few years? I doubt it.”
Chinese BMW owners mostly travel using a chauffeur, leading manufacturers such as BMW to unveil model variants with refinements – such as longer wheelbases – aimed purely at the Chinese market. The new BMW 5 Series for China has been developed with Chinese market requirements in mind.
In terms of Russia, Robertson said BMW had seen some signs of recovery although the state of the rouble had “created a number of tensions in the last 12 months.”
And with the market being “positive” at an oil price of USD55, there was major opportunity with a cost of USD80 per barrel.
This is particularly true for BMW in its premium range of X5 and 7 Series models. “The four-wheel drive 7 Series is very important as Russia has cold weather many times a year,” noted Robertson.
In terms of other key markets, the UK remains very much in BMW's sights with Robertson maintaining the scrappage scheme had “some momentum still,” although most such deals in Europe have either ended or are being phased out.
“We did 23,000 cars at BMW with the German scrappage scheme – the market would therefore slip,” said Robertson. “We think Germany will be 20% down this year but the premium market did not really benefit [from the scheme].
“The scrappage schemes could have been developed with a slightly different outcome – to us the benefits tended to be entry level cars with relatively low technology on board. It did not create many new consumers.”
And despite BMW estimating global growth in sales of single digits this year, Robertson insisted: “We can't be immune from some economies slipping backwards such as Greece, Portugal and Spain.”
India of course remains important but at 4,000 cars is nowhere near the powerhouse of the BRIC leader, China. “For a dealer to invest [in India] you need a couple of hundred cars a year,” said Robertson.