FRANKFURT -- BMW has cut prices in China for its locally built 3-series and 5-series models by 13 to 15 percent, the company said on Friday.
"It's the only market where we lowered our prices," a spokesman said, citing a weaker car market.
The Munich-based company manufactures BMW brand cars in China together with joint venture partner Brilliance China Automotive Holdings Ltd. in Shenyang. The plant has an annual production capacity of 30,000 cars.
Over the next four years, the company is planning to increase its annual sales in Asian markets from around 93,000 units in 2003 to 150,000 by 2008.
For the current year, BMW is forecasting unit sales rising between 6 percent and 9 percent after a rise of 9.4 percent in 2004.
It warned that earnings growth would no longer correlate with unit sales growth, though, since high oil and steel prices as well as the weak dollar put margins under pressure.
Broker Morgan Stanley told clients in a note on Friday: "We see BMW's deep price cut as necessary to counter Audi's price cuts in October 2004." Audi is BMW's key rival with local capacity with FAW Car Co.
"Although we were expecting this cut, its scale surprises us. BMW's original medium-term target of selling 30,000 units in the market is looking increasingly difficult to achieve," it continued.