BMW has shown its mid-cycle facelifted BMW 7 Series in Shanghai, China. It says the choice of location for the event underlined the significance of the Chinese market for the company’s flagship model: in 2018, 44% of global BMW 7 Series sales were made to customers in China (ca. 24,500 units). With the current ongoing launch of a whole range of new models, including the BMW 8 Series range and the BMW X7, the event was also an opportunity to showcase the BMW Group’s new luxury line-up. China will be a key market for these luxury vehicles.
Speaking at the event, Harald Kruger, chairman of the Board of Management of BMW AG and his two colleagues Nicolas Peter, board member for Finance and Pieter Nota, board member for Sales and Brand BMW, also underlined the wide-ranging strategic importance of China for every aspect of the company. China has been the BMW Group’s biggest single sales market since 2013, and the country is also home to the company’s most extensive R&D and production operations anywhere outside Germany.
China accounts for a quarter of BMW and Mini sales
The Shenyang-built seventh-generation BMW 3 Series is set to be one of 25 new BMW Group models due to be launched in China in 2019. China accounted for a quarter of all BMW and Mini customer deliveries in 2018 and with total sales of 639,953 vehicles, last year achieved a 7.7% sales increase. Harald Kruger said: “In 2019, we are aiming for further solid sales growth in China. The locally-produced BMW X3 will be our main growth driver, in addition to the many new models we will be introducing throughout the year. China is a very important strategic market for us, for sales, innovation and production, now and in the future.”
Seventh model to be localised in China
The Chinese city of Shenyang is home to the BMW Group’s biggest production base outside Germany, with two existing manufacturing plants and an engine plant. Construction work is underway at Plant Tiexi which will double the size of that facility. It was announced that the BMW X2 will later this year become the seventh BMW model to go into production in China. This decision was taken in response to demand for the BMW X2, increasing supply of this new sports activity vehicle in addition to those built in Germany at Plant Regensburg. This move, BMW says, will further strengthen the competitiveness of the company’s SAV offering in China, following localisation last year of the BMW X3 and in addition to the locally produced BMW X1.
From 2020, the fully-electric BMW iX3 will also roll off the production line at Plant Dadong, its sole production location, and be exported from China to markets worldwide. Both plants are currently undergoing extensive re-modelling and expansion measures; once the upgrade and extension is completed, further models could be localised as the total capacity is increased gradually to 650,000 units, thereby creating 5,000 new jobs, BMW says.
All these manufacturing plants, including the engine plant and battery assembly facility, are operated by the joint venture BMW Brilliance. Last year, the production of BMW vehicles in Shenyang grew by 24% to more than 490,000 units. The joint venture has been such a success, the contract is due to be extended until 2040. In this context, the BMW Group is planning to increase its share in the Joint Venture to 75% – a clear sign of the company’s belief in China’s continuing growth.
Crucial role in ACES development
In recent months, the BMW Group has opened two new R&D centres in Beijing and in Shanghai. It says they will play a crucial part in the company’s corporate strategy Number One>Next, as they will make a significant contribution to innovations in the four major innovation fields know as ACES (Autonomous, Connected, Electrified, Services/Shared). “These four areas are at the centre of our strategy for future success,” said Harald Kruger. “With our two new research and development facilities in China, we want to tap even more into the huge potential of this market, developing technologies and products here which will be of real benefit to customers globally, as we strive to strengthen our position as the world’s leading premium automotive manufacturer,” Kruger added.
BMW Group says it was the first non-Chinese automotive manufacturer to receive an autonomous driving road test licence in China. Given the complexity of the Chinese road network, lessons learned in China will be invaluable in other markets as the BMW Group moves forward in developing key future autonomous technology. To date, BMW China has completed tens of thousands of kilometres of road tests and hundreds of thousands of kilometres in simulations. The company will also take a seat on the board of the Baidu Apollo automotive driving initiative.
Connectivity plays a major role in China, and the BMW Connected app is already used by over 1.5m Chinese customers. Now, the app has been linked to the Chinese connected eco-system, thanks to a series of co-operations with Alibaba, Baidu and Tencent. In addition, the BMW Group will be the first premium carmaker to seamlessly integrate Alibaba Tmall Genie, the intelligent voice assistant from Alibaba AI Labs, into its cars, with the service becoming available later this year.
China is the world’s biggest market for electrified mobility and BMW is the country’s most popular premium New Energy Vehicle (NEV) brand. The company offers a total of six electrified models in China and sold over 23,000 battery electric and plug-in hybrid vehicles in 2018. The BMW Group was the first premium automotive manufacturer to establish a high voltage battery assembly facility in China and is also the only premium manufacturer that has its own NEV dealer network, with over 330 sales and service outlets in more than 130 cities across China. To further support drivers of electrified vehicles, with its ChargeNow services the BMW Group offers more than 80,000 charging pillars in more than 150 cities.
In the increasingly important field of digitalised mobility services, at the end of last year the BMW Group was the first non-Chinese company to be awarded a Ride-Hailing licence. The service is based in Chengdu, one of the largest ride-hailing hubs in the world, and runs with a fleet of 200 BMW 5 Series, half of which are plug-in hybrids. The ride-hailing service will complement the BMW Group’s existing ReachNow Car-Sharing operation, run in partnership with the local mobility company EVCARD and using a fleet of 100 BMW i3 vehicles.