BMW aims to close gap on Audi by focusing more on the small car and new energy vehicle markets in China

Gasgoo.com (Shanghai July 24) - After extending its partnership agreement with Brilliance to after 2028, German manufacturer BMW is looking for ways to catch up the rival Audi in the race for top manufacturer in the luxury automobile market in China.

In an interview with the National Business Daily, BMW Chief Financial Officer Friedrich Eichiner revealed the following: "In the future BMW will increase the number of domestically manufactured models from three to six. The Shenyang factory's annual production capacity will increase by another 100,000 vehicles. BMW's state-of-the-art three-cylinder and four-cylinder engines will also be produced domestically at Brilliance BMW's factory."

In contrast with previous models, two of the three models Dr. Eichiner mentioned that BMW will be introducing in the future will be front wheel drive. However, introducing more front wheel drive compacts to China will definitely put BMW's dealerships under pressure. Commenting on that topic, a representative from a BMW dealership stated: "The future compact vehicles that BMW will introduce may cause dealerships who rely on after sales services for revenues see their profit margins shrink even further."

Looking at BMW's new localization strategy for China, two major keywords stand out: 'compacts' and 'new energy'.

These trends are immediately evident when looking at the pure electric Mini E and plug-in hybrid ActiveE, as well as the BMW i3 and i8 new energy cars, which are scheduled to make their official Chinese market debuts this September. Dr. Eichiner further commented: "By the end of this year, the BMW 5 Series plug-in electric hybrid vehicles will also reach the Chinese market. Following Brilliance BMW's own brand Zinoro's first model, the E1, having tested the waters of the Chinese market, work on the second model has already entered the R&D phase."

On the compact side of things, two of the models BMW are planning to produce domestically are small cars. They will join the current Chinese-made 5 Series, 3 Series and X1. Dr. Eichiner explained: "Of the three models to be domestically manufactured in the future, aside from the X3, the other two are front wheel drive models. Both products will be positioned under the BMW 3 Series."

BMW has already been making the appropriate preparations, with Brilliance BMW's factories in Shenyang, Liaoning in the process of increasing their annual production capacity from the current 300,000 vehicles to 400,000 vehicles. The joint venture will also produce BMW's leading engine technology domestically by 2016.