BMW’s nine month old factory in China sold about 5,000 cars over the first five months of 2004 as it increases output to meet its target of selling 18,000 sedans this year.
According to Reuters, the plant aims to lift production from 42 cars a day now to 100 a day by the end of the year, despite decelerating market growth as the government in Beijing tries to gently slow the racing economy.
BMW and joint venture partner Brilliance China Automotive Holdings reportedly sold just over 1,000 cars in May from their plant in the northeastern industrial city of Shenyang.
Reuters noted that the partners are investing €450 million ($US540.1 million) by 2005 to expand the factory’s capacity – the joint venture, just a few hours drive from the North Korean border, is designed for initial annual capacity of 30,000 3 and 5 series BMWs.
Analysts reportedly say the venture will be crucial for Brilliance, the mainland’s top minibus maker and the first state-backed Chinese firm to list in New York when it debuted there in 1992.
Brilliance reportedly expects to sell 18,000 BMWs this year, though it has cut guidance on its own Zhonghua sedans to 25,000 units sold, down from an earlier goal of 28,000.
Reuters noted that, though car sales in China slipped 19% in May from April, as measures to rein in car loans clipped consumers’ wings, car makers plan to invest $US13 billion in China to triple annual output to six million cars by the end of the decade, raising fears a glut and subsequent price war will slash profits, particularly for smaller players such as Brilliance.