SHANGHAI – For BMW Group, January 16 turned out to be a day of “lucky 777s” in China.
The German premium carmaker announced at the world premiere of the new BMW 7 Series in Shanghai that the BMW X2 will later this year become the seventh BMW model to go into production in China at BMW Brilliance Automotive (BBA) in Shenyang, Liaoning Province, where the 1 Series, 2 Series Tourer, X1, X3, 3 Series L and 5 Series L are currently produced at the JV’s Dadong and Tiexi plants.
In addition, the Shenyang-built seventh-generation BMW 3 Series is set to be one of the 25 new BMW Group models, including 21 models under the namesake brand, due to be launched in China this year.
“In 2019, we are aiming for further solid sales growth in China. The locally-produced BMW X3 will be our main growth driver, in addition to the many new models we will be introducing throughout the year. China is a very important strategic market for us, for sales, innovation and production, now and in the future,” said Harald Krüger, Chairman of the Board of Management of BMW AG.
In addition to the world premiere of the new 7 Series, BMW also showcased the 8 Series and X7 luxury lineup, for which China will be a key market.
In fact, China is a crucial market for the 7 Series: in 2018, 44 percent of global 7 Series sales were made to customers in China (ca. 24,500 units). So no surprise that Shanghai was the location of choice for the world premiere of the new 7 Series.
China has been BMW Group’s biggest single sales market since 2013, and the country is also home to the company’s most extensive R&D and production operations anywhere outside Germany.
Last year, China accounted for a quarter of all BMW and MINI customer deliveries in 2018, with total sales of 639,953 vehicles, up 7.7 percent.
Shenyang is home to the BMW Group’s biggest production base outside Germany, with two existing manufacturing plants and an engine plant. Construction work is underway at Plant Tiexi which will double the size of that facility.
The decision to localize production of the X2 was taken in response to demand for the imported BMW X2, increasing supply of this new Sports Activity Vehicle in addition to those built in Germany at Plant Regensburg. This move will further strengthen the competitiveness of the company’s SAV offering in China, following localization last year of the BMW X3 and in addition to the locally-produced BMW X1. From 2020, the fully-electric BMW iX3 will also roll off the production line at Plant Dadong, its sole production location in the world, and be exported from China to markets worldwide. Both plants are currently undergoing extensive remodeling and expansion measures – once the upgrade and extension is completed, further models could be localized as total capacity is increased gradually to 650,000 units, thereby creating 5,000 new jobs.
All these manufacturing plants, including the engine plant and battery assembly facility, are operated by BBA. Last year, the production of BMW vehicles in Shenyang grew by nearly a quarter to more than 490,000 units. The JV has been such a success that the contract has been extended until 2040. BMW also announced its intention to increase its share in the JV to 75 percent – a plan that was announced last October following China’s lifting of the 50 percent equity cap on Chinese-foreign vehicle JVs, making BMW the first traditional foreign automaker to have majority ownership in a vehicle JV.
In recent months, BMW Group has beefed up its local R&D presence with the opening of two new R&D centers in Beijing and in Shanghai, which will play a crucial part in the company’s corporate strategy NUMBER ONE>NEXT, as they will make a significant contribution to innovations in the four major innovation fields known as ACES (Autonomous, Connected, Electrified, Services/Shared). “These four areas are at the center of our strategy for future success,” said Krüger. “With our two new research and development facilities in China, we want to tap even more into the huge potential of this market, developing technologies and products here which will be of real benefit to customers globally, as we strive to strengthen our position as the world’s leading premium automotive manufacturer.”
BMW Group was the first non-Chinese automotive manufacturer to receive an autonomous driving road test license in China. Given the complexity of the Chinese road network, lessons learned in China will be invaluable in other markets as the BMW Group moves forward in developing key future autonomous technology. To date, BMW China has completed tens of thousands of km of road tests and hundreds of thousands of km in simulations. The company will also take a seat on the board of the Baidu Apollo automotive driving initiative.
Connectivity plays a major role in China, and the BMW Connected app is already used by over 1.5 million Chinese customers. Now, the app has been linked to the Chinese connected eco-system, thanks to a series of cooperations with Alibaba, Baidu and Tencent. In addition, the BMW Group will be the first premium carmaker to seamlessly integrate Alibaba Tmall Genie, the intelligent voice assistant from Alibaba A.I. Labs, into its cars, with the service becoming available later this year.
On the electrification side, BMW Group offers a total of six electrified models in China and sold over 23,000 battery electric and plug-in hybrid vehicles in 2018. It was the first premium automotive manufacturer to establish a high voltage battery assembly facility in China and is also the only premium manufacturer that has its own NEV dealer network, with over 330 sales and service outlets in more than 130 cities across China. To further support drivers of electrified vehicles, with its ChargeNow services the BMW Group offers more than 80,000 charging pillars in more than 150 cities.
In the increasingly important field of digitalized mobility services, at the end of last year the BMW Group was the first non-Chinese company to be awarded a Ride-Hailing license. The service is based in Chengdu, one of the largest Ride-Hailing hubs in the world, and runs with a fleet of 200 BMW 5 Series, half of which are plug-in hybrids. The Ride-Hailing service will complement the BMW Group’s existing ReachNow Car-Sharing operation, run in partnership with the local mobility company EVCARD and using a fleet of 100 BMW i3 vehicles.