Channel Keeps Sinking, BMW Implements“Profit Four Drivers” in China

There is one month distance from Christoph Stark left BMW Great China president position for 1 year. In the past 10 months, industry delight guess about who is the next BMW senior manager leave the company? 5 times recall bring query to BMW as well.

However, BMW answer the query outside, meanwhile has a quite good transcript. In the first 10 months this year, BMW has sold 317 thousand in China mainland, which has increased 20%. Meanwhile, the 400th network is located in Wuhan, which put BMW as the largest network owner among luxury brands.

Chinese market enters slight growth period from 2 years ago, but luxury auto brands network building competition has never stop. Leaving second tier luxury brand is grabbing for the fourth position, Audi and Benz, which is the directly opponents of BMW, have announced their network development plan already. Audi owns 291 sales spots in China last year, but will increase to around 400 this year, and will plus another 100 in 2015. Benz similar develops its sales spots from 260 last year to 335 this year.

BMW, which exceeds 400 sales spots already, still keeps head low. “400 sales spots do not mean who has wider network. But we want to emphasis our diversification development.” Sheng TIAN, dealers development director of BMW, told media that three out of four 400 spots are 4S shops, and around 100 maintained centers, second hand car center, city exhibition and 5S shops. But most spots of Audi are 4S shops. “Compared with our opponents, diversification channels will satisfy customer demand better.”

With Chinese auto market grow mature, there is not much room left for 4S shop in first tier cities. Even second and third tier cities tend to saturation almost. “Go west” is recognized by luxury brands. As it known, BMW sinks its channel in advance. It comes from 5 4S shops in fourth and fifth tier cities to 109 shops. “BMW will build 40~50 4Sshops in future each year. 60% new network will build in fourth and fifth tier cities.” BMW China president Zhijun XU told reporter.

When channel developed rapidly, it is another issue that how to make sure dealer profit realization. Last year, Benz leaded price war among luxury cars, upper car sold one loss one. Dealers were wilderness filled with suffers. April this year, BMW Great China president Engelhard told media that it is important to “make sure dealer profit and sustainable development, and turnover first loss situation met last year.”