BMW, one of Germany’s flagship motor manufacturers emerged from the Rapp Motorenwerke in 1918 when the Versailles Treaty shut the aircraft manufacturer down. It retained the aircraft propeller as its logo to remind it of its past and continues to be fuelled by innovation. Recently BMW has made inroads into its historic foe across the English Channel, famously capturing both Rolls-Royce and Mini brands.
BMW Brand Stalls in Asia
The company targets the hearts and minds of successful males in emerging Africa and Asia. Powerful sedans from famous brands occupy favoured parking spaces in golf club lots and government basements there. Until the Chinese economy slowed BMW executives had been planning even more expensive models. However with China government intervention their plans for rapid growth have stalled in Asia.
Wall Street Journal reports the People’s Republic is putting caps on annual sales in heavily polluted cities, and limits on extravagance by top officials. “People are asking for greater discounts. I feel it’s getting more difficult to sell cars,” says one dealer. Many BMW dealers are requesting lower targets and subsidies to tide them over. Others like Audi are horizontally integrating their markets
Chinese Motorists Buying Down
Gulf Daily News confirmed that BMW sales in China dropped 5.5% in May 2015 year-on-year. Although the first setback in the past decade, this was not a blip on the radar. During the corresponding period sales of Mini jumped 17.8% suggesting the Wall Street Journal is correct in its estimation.
BMW’s marketing arm was quick to jump into the breach. A spokesperson pointed out there were two fewer May selling days in 2015 compared to 2014. I believe we can discount this on the basis that few of us decide to buy a new car on a particular day.
Crunch Time for BMW China
BMW as brand has to accept that China has a cooling economy and the government is actively clamping down on luxury cars. Allowing parallel unauthorised dealers to sell imported cars is not helping BMW either.