The BMW 535 Li Supreme Sound Edition makes its China premiere at the Shanghai auto show. [Photos / China Daily]

 

Localized models help fuel 55% surge in Q1

BMW Brilliance Automotive Ltd, the German carmaker's joint venture in China, is expected to register double-digit sales growth this year, according to its president and CEO Olaf Kastner.

The increase is not likely to be as high as 30 or 40 percent, but will surely be above 10 percent, Kastner said in an interview at the ongoing Shanghai auto show .

"In the mid and long-term, I'm fairly positive about the premium car market in China," he said, "I believe it will grow at a higher rate than GDP because of the growing middle class and the wealth level."

Last year, BMW Brilliance sold more than 140,000 vehicles in China, up about 50 percent from 2011.

In the first quarter this year, the joint venture delivered about 43,000 vehicles, a 55 percent surge over the same period last year.

More than 60 percent of the deliveries in the first three months were the BMW 5 Series long-wheelbase, a model specially tailored for local consumer preferences. The mid-sized sedan was launched three years ago in China.

In the first few months after it hit the market it sold about 5,000 units a month. The rate increased to an average of about 9,000 monthly last year and in March this year the number surpasse d 10,000.

At the ongoing Shanghai auto show, a limited-edition 5 Series with a powerful Bang & Olufsen audio system was introduced, an addition that is expected to further enhance the model's image and popularity.

The joint venture also produces the BMW 3 Series - both standard and extended wheelbase versions - and the BMW X1 in the northeastern city of Shenyang, where it has two plants.

Its new plant in the Tiexi district of Shenyang is among the most advanced of all BMW facilities worldwide.

Its annual production capacity is expected to reach 200,000 units by the end of this year. Combined with its plant in Dadong district, the joint venture will then have an annual capacity of 300,000 units. The number can be expanded further if the market demand is there, Kastner said, adding that vehicles made by the joint venture will have more than 50 percent of BMW's total sales in China in the future.

Last year, BMW Brilliance also started to build the German giant's latest N20 engines in Shenyang, the first production site for BMW engines outside Europe .

A new engine facto ry is now under construction near the Tiexi vehicle plant that will bring the joint venture's annual engine production capacity to 400,000 units over the next few years.

The latest step in BWM's localization strategy is a new brand by the joint venture called ZINORO focused on new-energy vehicles at the initial stage.

Unveiled earlier this month, the brand's first product will be an all-electric vehicle that debuts later in the year.

"If you do not invest early in the car industry, you lose later on," Kastner said about the new brand.

He recalled that in 2002 BMW started to invest in what the company called its Efficient Dynamic program to improve fuel efficiency.

Although at the beginning the huge investment seemed to others like "throwing away money", it did pay off years later as the carmaker significantly lowered carbon dioxide emissions across its entire fleet, which he said forged "a clear competitive edge" for the company today.

"So we will go on this way," Kastner said.

He added that BMW Brilliance also has plans to produce a plug-in hybrid 5 Series.

Combining fuel efficiency and enough travel range, the plug-in hybrids are likely to outsell pure-electric vehicles for a long time to come, Kastner said.