BMW to unveil raft of redesigned, upgraded models in China as sales slow

Friday, Jul 17, 2015

BMW AG is set to unveil a raft of redesigned and upgraded versions of its sedans and sports utility vehicles (SUVs) in China later this year, to shore up weak sales and raise its competitiveness against German rival Mercedes-Benz.

Global car makers have come under increasing pressure to up their game in the world's biggest auto market, where sales growth is forecast to more than halve to 3 percent this year.

But BMW has an additional challenge with Daimler AG's Mercedes-Benz fielding a more up-to-date line up of cars. On Monday, BMW's local joint venture partner, Brilliance China Automotive Holdings Ltd, said it expects to report a profit drop because of lower earnings from the tie-up.

BMW will launch an all-new, redesigned version of its flagship 7 Series sedan in the fourth quarter, and an upgraded version of its entry-level 3 Series later this year, China-based BMW spokespeople told Reuters.

The company also plans to release "new entry models" for the X5 and X6 SUVs, they said, declining to provide details.

The SUV segment has proven to be China's fastest growing, although sales skew toward small affordable models rather than expensive imports like the X5 and X6. Researcher IHS Automotive forecasts SUV sales to rise this year by more than a fifth.

The redesigns and upgrades are in line with longer-term plans, the automaker said. But analysts said they will be a shot in the arm as BMW's China sales growth shrank to just 2.5 percent in the first six months versus 23.1 percent in the first half of 2014, in part because of the lack of redesigned models.

The 7 Series in China was last redesigned in 2009, whereas Mercedes-Benz's competing S-Class was last refreshed in 2013, according to consultancy LMC Automotive.

Liu Jianbo, a 28-year-old accountant in the central city of Chongqing, said he chose the Mercedes-Benz C-Class entry-level sedan over BMW's 3 Series last November because of the latest design.

"The new model wowed me," he said.

Mercedes-Benz launched its latest C-Class in August, whereas the BMW 3 Series Liu considered was last redesigned in 2013.

Daimler Chief Executive Dieter Zetsche told reporters in Shanghai in April that sales of the C-Class shot up in China in the months after the new design was launched.

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