BMW to help out dealers with up to 5b RMB in funding

Gasgoo.com (Shanghai December 25) - In response to falling profits from its dealers, BMW has taken action to open a new association to supply additional funds for its dealer outlets, Shanghai Securities News reported today. According to Sang Zhimo, an analyst with China Automobile Dealers Association, BMW will supply up to 5 billion RMB ($814.86m) of funds, which will be awarded on a performance basis.

The formation of the association followed after a union of dealers from Zheng Tong Auto Services, Yongda Automobiles Services, Baoxin Auto Group, Rundong Auto Group and other networks sent a letter to BMW Greater China President Karsten Engel. The letter included a number of requests, such as asking for 6 billion RMB ($977.83) in funding and additional performance rewards.

Although agreeing to offer funding for its dealers, a source close to the matter stated that BMW will not grant subsidies to each of its dealers; rather, funds will be awarded based on sales performance and sales diversification. Less successful dealers will only receive minimal funding if any at all.