German premium carmaker BMW AG plans to further its localization in China, despite a slowdown in what is its biggest single market, as part of efforts to maintain its lead in the world’s luxury auto industry.
Company Chairman and CEO Norbert Reithofer said last week at a press conference in Munich that it is strengthening local production in China and would produce six BMW models “specifically” for the Chinese market in the coming years.
“We have extended our joint venture with Brilliance ahead of time until 2028,” Reithofer said.
BMW’s joint venture with Brilliance in the northeastern city of Shenyang now manufactures three models – the 5 Series and 3 Series sedans and the X1 compact SUV.
The group’s sales on the Chinese mainland surged by 16.6 percent last year from 2013 to 456,732 units, keeping the country as its largest single market in the world followed by the United States, Germany and Great Britain.
Reithofer said the Chinese market is “losing steam” and will slow to a more normal pace as a result of the deceleration of the economy of China.
“Slower economic growth will also affect the automotive industry. We continue to consider this in our strategic planning,” he said.
Earlier this month, the Chinese Government cut its 2015 economic growth target to 7 percent from 7.5 percent last year. The economy has entered a period of the “new normal”, which features a slower pace of growth but improved growth quality.
BMW Group’s global sales, including the three brands of BMW, MINI and Rolls Royce, rose by 7.9 percent to 2.12 million units last year from 2013. Meanwhile, it reaped 8.71 billion euros ($9.42 billion) in profit before tax, up 10.3 percent.
Read more at ECNS.