Brilliance BMW begins domestic production of xDrive BMWs, aims to compete with Audi's quattro

Gasgoo.com (Shanghai May 29) - Brilliance BMW officially released xDrive four-wheel drive variants of the BMW 328i, BMW 328Li and BMW 528Li earlier this week, the National Business Daily reported today. This is the first time that xDrive technology has been installed on domestically manufactured BMWs.

According to Brilliance BMW Senior Vice President Wan Borui, the introduction of xDrive variants will help boost the competitiveness of the 3 and 5 Series, as well as provide more choices for customers.

From a market perspective, 'sporty' and 'personalized' four-wheel drive models exhibit great sales potential. As such both BMW and Audi are paying more and more attention to this segment. Mercedes-Benz, not to be left out, has also been rumored as preparing for domestic production of its four-wheel drive E320.

During the press announcement, Mr. Wan pointed out that BMW offers xDrive on 92 of its models available internationally; these models comprise over one-third of BMW AG's total global sales volume.

In the China market, BMW offers xDrive on 22 of its sedans and 15 of its SUVs (which the manufacturer labels as sport activity vehicles, or SAVs). In 2013, sales of SAVs in China exceeded 100,000 units, while sales of xDrive equipped vehicles grew 25 percent from 2012 to 2013.

For its part, Audi has already brought over its quattro system to China. According to statistics from the manufacturer, Chinese of sales of quattro-equipped Audi's accounts for over 30 percent of all Audi sales in the country. Four-wheel drive versions of certain Audi SUVs, such as the Q3, are among its best-selling models.

Judging from BMW's pricing policies, it seems they are capitalizing on Audi's early entry into the Chinese four-wheel drive market by raising prices to match high demand. The 3 Series xDrive are priced between 458,800 RMB and 486,800 RMB ($74,334-$78,871), while the comparable Audi A440 TFSI quattro is available at just 349,000 RMB ($56,544). Similarly, while the Audi A6 L35 FSI quattro carries a starting price tag of 576,600 RMB ($93,420), the BMW 5 Series xDrive has an official suggested retail price of 669,600 RMB ($108,488).

An anonymous Beijing-based Audi dealer revealed that the introduction of the BMW 5 Series xDrive with its different price point is putting a lot of pressure on Audi A6L quattro sales.

Competition between BMW and Audi is growing increasingly fierce. According to statistics from the China Passenger Car Association, sales of the FAW-Audi A4L from January to April totaled 39,600 units, representing year-on-year growth of just 0.4 percent. By comparison, sales of the Brilliance BMW 3 Series Li over the same time period totaled 30,500 units, growing an impressive 72 percent from last year. In the midsize market, sales of the FAW-Audi A6L totaled 55,800 units, up 6.2 percent from last year, while 46,500 Brilliance BMW 5 Series Li were sold during the same time period, up 17 percent.