BMW Eyes Expansion In Asia

Bangkok, July 29: | Updated: Jul 30 2002, 05:30am hrs
German luxury car maker BMW AG unveiled its expansion plans for Asia on Monday, saying the region will be the main area of growth over the next decade. Norbert Reithofer, board member for global production, said BMW would start assembly and export of its flagship 7-Series limousines from its Thai assembly plant in Rayong in early 2003.

“We strongly feel that the growth of the world automotive markets in the next 10 years, especially that of the premium segments, will be rooted in the Asian markets,” he told a news conference. Reithofer said BMW had a long-term plan for the Asia-Pacific region to contribute 25 per cent to its global unit sales, up from less than seven per cent in 2002. BMW executives declined to say when the company could achieve that target.

The German car maker said it delivered 36,627 BMW and Mini cars to buyers in the region in the first half of 2002, up 19 per cent from the same period a year ago. Of that figure, 21,339 units were sold in Japan. Luder Paysen, head of BMW’s Asia-Pacific operations, said BMW planned to double its annual Asian sales within five years. BMW’s first-half sales in Asia included 4,200 Mini cars, of which about 3,800 were delivered to buyers in Japan.

Reithofer said BMW’s investments in Asia included a 50:50 joint venture with Brilliance China, China’s largest minibus marker, to produce up to 30,000 cars a year for the Chinese market. Paysen told reporters BMW’s Chinese plant at Shenyang would produce 3-Series and 5-Series cars from the last quarter of 2003. BMW executives told it would take the German firm five to eight years to fully utilise its 30,000-unit capacity in China. Reithofer said BMW had no plans to export cars from China.

“China is a very huge market. The first two or three steps are for us to exploit the market in China,” he said. BMW sold 3,923 limousines in China in the first half of 2002, up 31.9 per cent from the same period a year ago. China is one of eight Asian markets in which BMW posted high double-digit sales growth in the first half.

Reithofer said BMW was investing another 15 million euros ($14.7 million) this year to expand its Thai plant at Rayong, which would be made the hub of its assembly production in the 10-nation Association of South East Asian Nations (ASEAN).

The plant has since June exported 3-Series limousines to Indonesia to exploit a low tariff regime provided under the ASEAN Free Trade Area (AFTA) scheme. BMW’s Rayong plant will also ship 7-Series cars to Indonesia from next year. BMW expects to use 6,000 of the Rayong plant’s 10,000-unit annual capacity by 2005.