BMW in China

            
 
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Case Details:

Case Code : MKTG312
Case Length :21 pages
Period :-
Pub Date : 2013
Teaching Note :Not Available
Organization :BMW group, BMW Brilliance Automotive Ltd. (BBA)
Industry :Automotive Industry
Countries :China, Germany

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Introduction

In July 2013, the world’s largest premium automaker, Germany-based Bayerische Motoren Werke AG (BMW), announced that China was likely to surpass the US to become its largest market in 2013. The company announced that in the first six months of 2013, BMW’s sales in China were at 182,800 units as against the 172,787 units it had sold in the US. The company attributed the growth to demand from smaller cities in the country. According to Karsten Engel (Engel), Chief Executive of BMW Group China, “There are 100 cities with more than a million inhabitants in China with no premium car dealers at all, so this shows the huge potential we’re having in this country.”

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BMW entered China in 1994 by establishing a representative office. It entered into a joint venture with Shenyang, China-based Brilliance China Automotive Holdings Ltd (Brilliance) in 2003 after which it operated as BMW Brilliance Automotive Ltd. (BMW Brilliance). The operations included production, sales, and after-sales service of vehicles. The company grew rapidly in the growing Chinese economy. From selling 800 cars in the year 1994, it had sold more than 900 cars a day as of 2013. The company followed several strategies that helped it become one of the top luxury automobile companies in the country.

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