- The Washington Times - Thursday, February 27, 2003

SINGAPORE, Feb. 27 (UPI) — While many foreign manufacturers have already set shop in China, German carmaker BMW is still going through the motion. But though this might be considered a late start in the race to conquer the huge China market, the manufacturer believes the time is now just right for its products.

"If we had entered the market 10 years ago we would have failed, and if we had entered the market five years ago we would have struggled," said Luder Paysen, senior vice president of BMW Group's sales division. "It's only in the last few years that China has developed a middle class. Now a lot of small and medium sized firms are successful, and businessmen want to show their success and what better way than with a BMW."

"It could be considered a late entry if we were in the mass car market, but we needed to wait for the development of the upper end of the market," added Michael Ganal, member of BMW's Board of Management.

China-based automakers, including foreign joint ventures, sold 3.25 million vehicles in 2002, a jump of 37.1 percent from 2001, official Chinese statistics say. BMW sold more than 6,600 cars in the mainland, up 62 percent.

"Our sales were actually held back because of the restricted import quota and license available for imported cars," Ganal said.

BMW is planning to set up a joint venture with Brilliance China Automotive Holdings, which is pending government approval. The feasibility study was submitted last September, and Ganal expressed confidence approval by the Central Council will be received during the next few weeks.

"We are fully in line with our timetable and remain confident that production can commence by end 2003," he told a news conference.

The group is planning production at a facility in Shenyang, which will have a capacity of 30,000 cars.

Paysen said the automaker would concentrate on selling the BMW brand, as opposed to the MINI.

"Selling the MINI depends on the maturity of the market," he said. "As long as premium is linked to size, the MINI is not the right product there."

But Paysen was confident China could overtake Japan as BMW's top Asian market in 5 years. It sold 45,300 cars in Japan last year, up 28 percent on the year thanks to the MINI, at a time when the segment of large luxury cars fell by 20 percent.

Indeed the German carmaker has high hopes for the Asian region, where it sold 78,000 vehicles in 2002 (including the MINI), a 28 percent increase on the year. Ganal said it expects to double its sales in Asia in the next five years.

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