BMW in race with Audi for elite
fleet deal in China
BEIJING - German luxury-car maker BMW is
hoping high-ranking Chinese government officials
will choose its vehicles over those of its rival
Audi.
The Munich-based company is in
discussions with regulators to put its vehicles on
the government's shopping list, said Christoph
Stark, president and chief executive officer of
BMW Group China, according to China Daily.
"The government purchase sector is
important for us and we have the confidence to
enter it," Stark said.
His remarks come
close on the heels of German luxury-car maker
Mercedes-Benz's China-made
sedans making it to the government purchasing list
this month.
In 2003, BMW began assembling
its 3- and 5-Series sedans in a joint venture with
Brilliance China Auto in the northeastern city of
Shenyang. Most of its Chinese customers are
private buyers.
"We'll try to explore the
possibility of more customers, such as government
institutions and state-owned companies," Stark
said.
Last November, the venture launched
new 5-Series sedans that are 14 centimeters longer
than the old ones and only available in China. The
move was seen as part of BMW's efforts to make
forays into the government-purchase sector.
Foreign and domestic car makers have been
exploring this fast-growing segment for some time
now. According to industry data, governments at
all levels in China last year spent 70 billion
yuan (about US$9 billion) buying vehicles.
Audi, which kicked off its China
production in the early 1990s, dominates the fleet
serving high-ranking government officials with its
hot-selling A6 sedans. This has attracted the
attention of other elite consumers and boosted
sales.
Audi's sales in mainland China
reached 80,808 units last year, up 39% from 2005.
BMW's mainland sales, on the other hand, surged by
51.3% to 36,357 units, including 22,550 locally
made 3- and 5-Series sedans.
Mercedes-Benz
sold 21,200 cars on the mainland and in Hong Kong
last year, an increase of 32%. It began assembling
its E-Class sedans at the beginning of the year in
Beijing.
Alfred Rupp, CEO of BMW's venture
with Brilliance, said the venture has lifted its
annual production capacity to 41,000 units from
30,000 to meet growing demand. "We can raise
capacity further by improving processes," Rupp
said.
He said the venture will find 80
first-tier suppliers in China by the end of this
year, up from 50 at present. It also plans to
increase its procurement of locally made spare
parts to 3 billion yuan this year from 2 billion
yuan in 2006, he added.
Stark, refuting
recent reports that the German car maker is
seeking a second partner in China, said: "BMW and
Brilliance are satisfied with the venture's
performance."
Luxury-car sales in China
amounted to 160,000 units last year, a little less
than 4% of the nation's entire passenger-car
sales, according to Stark.
Analysts
predict sales will grow rapidly as the number of
rich buyers in China grows by leaps and bounds.
Sales of China-made vehicles climbed 25%
to 7.22 million units last year, including 4.2
million passenger cars.
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