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Published on October 1st, 2012 | by Daniel Sherman Fernandez

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China’s Automotive Consumption Great For Audi and BMW

BMW has been slower to capitalize on growth in the Chinese market than Audi, which has built cars in Changchun as part of a joint venture with First Automobile Works since 1996. BMW is now quadrupling its Chinese production capacity, having started manufacturing with partner Brilliance China Automotive Holdings Ltd. in 2003. Surging China sales have helped Audi double deliveries in the last 10 years, and the luxury brand now accounts for 47 percent of group operating profit. Mercedes-Benz and BMW are both considering following Audi in setting up production in Mexico for the U.S. market, Carlos Guzman, head of ProMexico, said in an interview last month. Mercedes and BMW, unlike Audi, already have U.S. factories.

Audi will invest USD1.3 billion in a plant in the state of Puebla to produce the Q5 SUV. The plant is scheduled to open in 2016 with an annual capacity of 150,000 vehicles. “The new factory will help Audi in the U.S.,” Denninghoff said. “The 150,000 cars that will come there can certainly compensate for slowing growth in China.”

BMW is expecting to regain some sales momentum with the arrival of the wagon version of its 3-series model in showrooms this month. The derivative usually accounts for two-thirds of 3-series registrations in Germany, the carmaker said. BMW has held the luxury-car sales lead since 2005, when it passed Mercedes to grab the top spot. Last year, BMW brand sold 1.38 million cars and SUVs. Audi sold 1.3 million units, while the Mercedes brand sold 1.26 million vehicles. 


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