BMW eyes bigger market share
By Gong Zhengzheng (China Daily)
Updated: 2004-04-12 08:45

German luxury car manufacturer BMW plans to produce three additional models this year and more than double its sales networks in China by 2005 to facilitate its fast-growing business in the booming car market.

BMW launched the 318i sedan over the weekend with its joint venture company, China Brilliance Auto in Shenyang, capital of Northeast China's Liaoning Province.

The 2.0-litre 318i is the best seller within the BMW Group, which includes the Rolls Royce and Mini brands.

BMW will also introduce the 525i and 520i sedans into the joint venture later this year, said Franz Jung, the venture's senior vice-president.

He declined to reveal prices of the three models.

The joint venture started to produce BMW's 325i and 532i sedans late last year.

Jung said BMW will increase the number of Chinese dealers for the joint venture to 55 from the current 24.

The dealer number will rise to 41 at the end of this year, he said.

"We expect these dealers will also be able to sell BMW's imported sedans in China," Jung told China Daily.

Industry sources said Chinese regulators will allow foreign automakers to combine sales networks of their vehicles produced in and exported to China in a new auto industry policy expected to be released in the first half of this year.

"Our business in China this year will maintain the growth momentum of last year," Jung said.

In 2003, BMW's sales shot up by 176 per cent to 18,445 vehicles on the mainland, including 4,359 units of the 325i and 530i, which was "much better than expected" as Jung said.

BMW will also begin exporting its X3 and 6 series sedans to China this year, he said.

"We are now increasing our production at the joint venture progressively to satisfy mounting demands from Chinese consumers," he said.

The medium-term target for the joint venture is to produce 30,000 3 and 5 series sedans annually.

"We are doing much better than Mercedes-Benz, which is our strongest rival in China," Jung said.

His remark appears to intentionally belittle Audi, which is dominating China's premium car market through local production.

Audi sold more than 60,000 sedans last year in China, mainly from FAW VW, Volkswagen's joint venture with First Automotive Works Corp in Jilin Province.

FAW VW said earlier that it will produce 150,000 Audi sedans a year by 2008.

Market competition will heat up  as more luxury brands are produced in China.

"The luxury car sector is much less competitive in China than the low- and medium-end car segment, and has room for more players to enter," said Jia Xinguang, an analyst of the China National Automotive Industry Consulting and Development Corp.

Mercedes-Benz's E and C-class sedans will be produced at the end of this year by Beijing Jeep, DaimlerChrysler's joint venture in Beijing.

Swedish Volvo Car Corp, controlled by Ford, is also seeking local production in China.

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