BMW on Growth track in Asia & the Middle East

Official Release: The BMW Group has made an excellent start to the new year in China with a substantial increase in sales of more than 122%. A total of 11,919 BMW and MINI brand vehicles (prev. yr. 5,360 units) were sold in January, more than double the volume sold in the same month last year. At 11,369 vehicles, the BMW brand for the first time exceeded the threshold of 10,000 units sold in one month. The BMW 7 Series performed extremely well, with sales of 1,705 vehicles (prev. yr.: 844 units/+102%). China thus remains the largest single market for this key model series. “We will continue on our growth track in the Chinese market in 2010. Although we already saw a very strong performance there last year, we are once again aiming for growth in the double-digit percentage range in this country,” said Ian Robertson, member of the Board of Management of BMW AG, responsible for Sales and Marketing, in Munich on Friday. Last year the company sold 90,536 BMW and MINI brand vehicles in China: an increase of 37.5%.

The Asia and Middle East region, with its diverse markets, is becoming increasingly important to the BMW Group. In 2009 the company made substantial gains of 10.5% in this region, with sales for the BMW and MINI brands totalling 183,111 automobiles. As such, Asia accounts for around 14% of Group retail. In comparison, North America comprises 21% of total retail and Europe 59%.

Following the creation of the first sales subsidiary in 1981 in Japan – where the BMW brand is now market leader in the premium segment – the BMW Group began to steadily expand its involvement in Asia in the mid-1990s by adding its own sales locations and production facilities. “Our strategy of investing early in emerging markets with a high development potential, and helping to shape the growth there, is today paying dividends,” added Robertson. This is also clearly illustrated by the example of India, where the company sold only 227 units in 2005. Establishing its own sales subsidiary in 2006 made it easier to develop market potential – and already by 2007 retail volumes surged more than fivefold to 1,387 units. Last year, the BMW brand was the market leader in India’s premium segment with sales climbing 24.4% to 3,619 vehicles. BMW was also number one in the premium segment in Korea in 2009 for the third consecutive year with a market share of 23.8%. Korea is the fourth largest market for the BMW 7 Series after China, the US and Germany.

Besides China, India and Korea the markets served by import partners in Asia and the Middle East also performed very well in 2009. Despite the global economic crisis, the BMW Group reported a slight increase of 1.5% in sales volumes in the markets in Southeast Asia served by importers to reach a total of 5,840 units. Growth was driven in particular by Indonesia (901 units/+25%), Vietnam (334 units/+106%) and Brunei (213 units/+16%).

In the Middle East the BMW brand was able to expand its market share by 4% in the 14 markets served by importers. The best-selling vehicle in these markets was the BMW 7 Series with 4,620 units sold: an increase of 75% over the previous year. Markets with particularly strong growth included Syria with an increase of 53% (878 units), Lebanon with 48% (1,001 units) and Saudi Arabia with 27% (2,555 units). “The BMW Group is also performing well in the markets of Southeast Asia and the Middle East. We intend to maintain this course again this year,” says Robertson.

A key success factor for participation in Asia’s strong growth is the gradual expansion of production capacities from 41,000 units currently to 100,000 units at the Shenyang location in China in the future. Since 2003, BMW 3 Series and 5 Series vehicles for the domestic market have been built jointly with BMW Group’s Chinese Joint Venture Partner Brilliance.

Towards the end of the year the Indian CKD plant in Chennai will also begin turning out the BMW X1 alongside the BMW 3 Series and 5 Series. This will form the basis for the BMW brand’s entry into India’s sports activity/sports utility segment. At the same time, the company will also be expanding its Indian retail network, establishing retail and service outlets in ten further cities across the Indian subcontinent.

Asia is not just an attractive retail market and production location for the BMW Group. Rising sales volumes also go hand in hand with more extensive procurement activities. For this reason, the BMW Group established a new purchasing office in South Korea in November 2009. An international sourcing organisation facilitates procurement of the highest quality available worldwide and is also well-positioned to offset currency fluctuations. The BMW Group’s key suppliers in the Asian region are based in China, Japan and South Korea. The purchase of state-of-the-art battery technology from SB LiMotive, a 50:50 Joint Venture between Bosch and Samsung SDI, marks a milestone in the cooperation with suppliers in the Asian region. As previously announced, SB LiMotive will supply the lithium-ion storage units for the BMW Group’s Megacity Vehicle which will come onto the market by 2015.