BMW (BMWG.DE) remains optimistic about its car sales prospects in China for this year, undeterred by an ongoing electric vehicle (EV) price war and subdued overall demand, according to the company’s Chief Financial Officer (CFO), Walter Mertl, speaking at the IAA car show in Munich.
In his first interview since taking over as CFO in May, Mertl informed Reuters that BMW’s performance in China had exceeded expectations, with a growth rate of 3.7% in the first half of the year.
This outpaced the broader global auto market’s growth, and BMW anticipates this trend to persist.
Mertl expressed confidence, stating, “We are currently observing and assuming that our sales this year will surpass those of the previous year.”
He clarified that the price competition primarily affected the lower-priced segments of the auto market, which BMW isn’t actively involved in.
China encountered a second consecutive monthly decline in passenger vehicle sales during July.
Despite discounts and government incentives, consumer reluctance to buy cars amid economic uncertainty and a sluggish housing market persisted.
The price reductions initiated by Tesla (TLSA.O) in early 2023 have permeated various Chinese brands, with General Motors (GM.N) and Volkswagen (VOWG_p.DE) also participating in a recent wave of price cuts during the summer.
BMW recently adjusted its 2023 forecast for group vehicle sales, projecting robust growth within a range of 5% to 9.9%.
After a 4.8% decline in vehicle sales to approximately 2.4 million units in 2022, including a 6.4% drop to 791,985 units in China, the company remains resolute in its pursuit of higher sales figures.
Addressing concerns about a decline in demand due to the reduction of government incentives for electric vehicles in Germany, Mertl acknowledged a potential temporary impact.
However, he assured that normalcy would eventually prevail.
BMW divulged details about its new electric platform, “Neue Klasse,” over the weekend.
As part of its strategy, the company aims to elevate the proportion of EVs in its total vehicle sales to 15% in 2023 and further to 20% in 2024, a substantial leap from the 9% share in 2022.