The BMW Group reported a 36.4 percent growth in sales on the Chinese mainland for the first nine months this year, bucking the declining trend of last year.

BMW sold 16,999 vehicles during the January-September period — 16,767 sedans and 232 Mini autos — on the mainland, 80 percent of which were made domestically.

Sales of autos produced by BMW Brilliance Automotive Ltd, a joint venture established by Brilliance Automotives Co and BMW Group, were recorded at 11,548 units, a 46.9 percent increase year on year.

In 2004, BMW sold 15,480 vehicles, down 16 percent from a year earlier, hurt by high prices, even as its sales grew 10 percent on the world market.

"From the beginning of this year, they have launched a price reduction, averaging 10 percent, which is very attractive to local customers and has proved quite effective," said Li Jian, an auto analyst with Xiangcai Securities Co Ltd.

"The Chinese market is a pricedriven market. As long as automakers localize the production and lower costs, the number of local buyers will grow rapidly," said Li.

Zhu Junyi, an analyst with Shanghai Information Center Automobile Industry Research Office, said BMW's sales boom this year can be attributed to its localization strategy. This is the reason why foreign automakers are eager to cooperate with domestic firms to set up local bases, he reasoned.

He also estimated that the proportion of domestically-made auto parts equipped in cars will grow up to 20 percent.

Analysts say that foreign automakers are taking advantage of the supportive auto policies to make their mainstream models on the mainland to lower costs, while others are choosing to produce luxury models to establish their brand image.

On the world market, BMW Group continued its sales growth for the past nine months with sales climbing to 988,563 units, up 11.4 from the same period last year.

The sales grow 25.7 percent to reach 23,617 units on the Chinese mainland, Hong Kong and Macau by the end of September.

Mini branded autos set the highest record on sales, with 159,413 units being sold, an increase of 11.6 percent year on year.

(Shanghai Daily October 25, 2005)