Brilliance China Automotive – BMW’s local manufacturing and sales partner – expects its net income to decline by around 40% in the first half of 2015, due to sluggish demand for premium cars and a rise in expenses.
Cost rises in the first six months of 2015 were driven by higher dealer subsidies, falling prices and new model launches.
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Barclays analyst Yang Song told Bloomberg: “According to dealers, recent volatility in the [share market] has led to some cancellation of passenger vehicle orders with the premium segment more affected than mass market brands.”
BMW said: “The mid- and long-term conditions and prospects for the Chinese car market continue to be attractive. These include the low rate of car ownership, an expanding middle-class, our strong market position and the continuing growth of the premium segment.”
