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BMW sales rebound in China

Carmaker looks to get more Communist party business

Munich. BMW's sales in China have rebounded because of a June surge. The German carmaker sold 3,042 cars last month in China, Hong Kong and Taiwan, up 32.4 percent compared with the same month in 2003. The big gain helped BMW finish the first half with sales of 13,852 vehicles, up 3.2 percent from the year-ago period.

"We are assuming our total sales for this year can surpass last year's sales by a substantial margin," said Christoph Stark, CEO of BMW Group Region China. BMW sold a combined 23,004 units in China, Hong Kong and Taiwan last year. The carmaker has made a big turnaround in the region as its first-quarter sales were down 6.6 percent to 6,054 units.

The boost is partly due to a change in BMW's customer targeting strategy. Private consumers will remain the primary clientele, accounting for about 80 percent of sales. But sales to the Chinese government and Communist Party organizations is "of growing importance" to BMW, Stark said.

VW and Audi dominate this niche, which some carmakers avoid because of fears it will hurt their brand image in the country. Stefan Krause, BMW's finance chief, sees "good potential in official vehicles for the middle term." BMW is now creating the right "organizational conditions" for such sales, he said.

Production slowdown

BMW has pushed back to 2010 the year it will reach its planned production capacity of 30,000 units a year of the 3 series and 5 series. It originally aimed to reach 30,000 units a year by 2005 or 2006.

Only one production shift is now running in Shenyang, but it's operating at full capacity, BMW said. The company is now preparing to launch a second shift. That shift originally was supposed to start last year.

Tags: China Retail

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