BMW planning to triple production across Chinese market

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BMW X1

The Audi , Mercedes-Benz , and BMW rivalry has always existed, but has rarely ever been as fierce at it his right now. Not only are all three manufacturers competing in DTM racing for the first time in history, but the three are also jostling over the Chinese market in order to become the country’s largest manufacturer of luxury vehicles.

With Volkswagen confirming its plans to help increase the popularity of Audi in China, BMW has announced that it plans to triple output across its Chinese production facilities to 300,000 units annually in line with the opening of the new Tiexi production facility. This facility will soon start production of the
X1 in the coming weeks.

However, not everything coming out of this announcement is positive as there’s a risk BMW could be putting too much faith into the Chinese market and risk overdependence on its sales in order to boost profit levels.

A research analyst from Frost & Sullivan pointed out that, “There are no other regions that can provide for such massive numbers of sales as China can,” he said. “In the event of economic turmoil in China, most German automakers could end up with hundreds of thousands of unsold cars.”

Just like most economies operate, China faces its fair share of good and bad patches and right now the Chinese economy is booming which can only mean one thing. If the U.S. and the Eurozone are anything to go by, China’s growth may slump in the next few years and this would obviously hamper European firms entering the market.

Conversely however, Audi and Mercedes-Benz will also be in similar boats if it all goes bottoms up but for BMW’s sake we wish them all well with this expansion.

Source: Bloomberg

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