BMW will on Saturday launch its bid for a bigger piece of the fast-growing Chinese car market when its first locally-made sedans hit the market, Reuters reported.
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BMW reportedly said its 325 model will be priced at 473,850 yuan ($US57,250), considerably less than imported BMW models, and will not be subject to the high taxes levied against luxury models shipped in from overseas.
“In the past, we focused on the 7 series and neglected the 3 series in China, so it’s not very strong in the premium segment – the 325 will change that,” Gunther Seemann, managing director of BMW China, told Reuters.
BMW, which makes the cars in partnership with Brilliance China Automotive Holdings, expects to sell between 2,000 and 2,500 of the 325 this year in China, BMW China executives told the news agency, adding sales would rise to 9,000 next year.
The German company used to sell its imported 318 model, a less powerful car, for 580,000 yuan in China, Reuters noted.
While China’s auto sector has been boosted by a spurt of new economy models hitting the market, more Chinese are eyeing up-scale cars, Reuters said, adding that of the 70,000 cars China imported last year, about two-thirds cost around 400,000 yuan ($48,300), showing a strong appetite for high-end models, according to analysts.
Executives told Reuters that BMW’s mid-sized 5 series will start rolling out from the Brilliance plant in the northeastern city of Shenyang at the end of this year – the venture’s plant has capacity for 30,000 BMWs a year.
“We expect double digit sales growth next year,” Seemann told Reuters, adding: “Up to September, we’ve sold 9,593 units and we expect to sell 12,500 by the end of the year.”
According to Reuters, BMW sold about 6,800 cars in China last year, a rise of 60% from the previous year, and BMW and Brilliance, China’s largest van maker, agreed in March to invest 450 million euros ($480 million) in their Chinese venture by 2005, with each holding a 50% stake.
Car sales in China soared 60% last year to 1.2 million, making it the fastest growing major car market in the world, Reuters noted, while car output in the country climbed almost 90% to 1.25 million in the first eight months of 2003, year on year.
Reuters added that BMW faces competition from Volkswagen AG’s Audi, which has dominated the luxury market through a venture with First Auto Works, China’s top car maker, which makes about 35,000 of the luxury cars per year.
“We don’t consider Audi a premium brand. The main competitor to the 3 series is the C class,” Seemann told Reuters, referring to DaimlerChrysler’s imported Mercedes Benz sedan.
