The groundwork that would allow German car maker BMW AG to boost manufacturing and begin supplying from its largest market – China, to consumers all over the world including North America, even as trade dispute between the U.S. and China keep piling up.
According to BMW partner in China – Brilliance China Automotive Holdings Ltd, the joint-venture plant in the northern city of Shenyang would be the place where the German car maker is planning to manufacture its first all-electric sports utility vehicle which is being called the iX3. An early glimpse of the car was made available by BMW at the Beijing auto show on Wednesday.
BMW Chief Executive Officer Harald Krueger told reporters in Beijing that while the maker of the luxury cars is evaluating the business environment for exporting other Chinese-made models from China, it would be possible to export BMW’s first electric SUV.
The potential export of Chinese made cars from the country across the world would not only make BMW to be the first major luxury-car maker to do so but it also signals that China is no longer looked at as a country only manufacturing cheap products. Despite the export environment still abounds with whiffs of higher import tariffs by the U.S. on Chinese made products, this plan by BMW pits its Shenyang unit for supplying SUVs to the U.S. which is also the second largest market for BMW. Confidence among foreign car makers about the capability of their joint ventures in China being able to churn out high quality exportable vehicles is increasing because of the Made in China 2025 development by the Chinese government.
“As long as the vehicle is built properly, and BMW will make sure of that, it doesn’t matter too much to consumers where the car comes from,” said Tim Urquhart, an automotive analyst at market researcher IHS Markit. “This will see a low-volume vehicle being made at a low-cost site.”
The Chinese government has also already announced sweeping plans to ease ownership regulations for foreign car makers in the country so that foreign companies would eventually own a 100 per cent subsidiary of their own in China by buying out the stakes of their local partners in China or by setting up completely new units. Krueger said that any potential change from the present ownership structure of BMW in China would be gradual process.
The shifting focus of the auto industry is also reflected in eth decision of BNW to choose China to be the only site for the initial production site of the iX3. The stringent emission regulations in the largest electric-vehicle market in the world -China, would be easily met by BMW by the production of the new model in China for the Munich-based company. The German car maker already manufactures a plug-in hybrid version of its X1 SUV in China.
(Adapted from Bloomberg.com)