BMW to source car parts from China

BMW AG said it will increase sourcing from China as part of moves to offset soaring costs of raw materials.

The world's largest luxury car maker plans to buy 4.4 billion yuan (US$619 million) worth of spare parts from 150 domestic suppliers this year, compared with 3.6 billion yuan last year, Alfred Rupp, president and chief executive officer of BMW Brilliance Automotive Ltd, said yesterday.

The joint venture has been optimizing its operations for better production efficiency to cover rising costs, Rupp said. "But there are limits (to doing so), and we will find other solutions."

Given that the market is competitive, local sourcing is crucial for luxury car makers in China, which are facing higher costs but still have to remain price competitive to attract buyers in the world's second-largest auto market.

BMW also said it will expand its dealerships from last year's 90 to 120 outlets by the end of the year. It plans to import its BMW 1 Series in April to broaden its product mix.

BMW now trails Audi in terms of sales in China where the luxury car segment is growing nearly 30 percent year on year.

Last year, Audi's sales in China jumped 24.8 percent to 100,888 units from a year earlier while BMW sold 42 percent more at 51,588 units.

BMW held a ground-breaking ceremony for its biggest training center in Asia in Shanghai's Jiading District yesterday.

It costs 100 million yuan, and the first phase is due to be completed by the end of this year.