Brilliance China Automotive, BMW’s Chinese partner, missed analysts’ full-year profits estimates as the slowing economy intensified competition.
Brilliance China Automotive ‘s net income was up 27% to 2.3 billion yuan ($370 million), compared with analysts’ estimates of 2.36 billion yuan. Sales dropped 8.2% to 5.92 billion yuan. Last year China’s economy increased only 7.8%, the lowest level in the past 13 years, forcing automakers to offer increased incentives to attract customers.
“During the year 2012, China’s automobile sector continued to show mild growth,” Wu Xiao’an, Brilliance’s chairman, said in the statement. “The years 2013 and 2014 will remain challenging for this business, and it is likely that the minibus operation will bring negative financial impact to the Group’s overall performance during those periods.”
Brilliance assembles in China BMW’s 3- and 5-series sedan and said that the German automaker’s sales in the country increased 49% in 2012 to 160,849 units. BMW plans to sell 200,000 vehicles this year in China. BMW’s sales in China in 2012, including vehicles imported from Germany, increased 40% to 327,341 units, while Audi’s sales increased 30% to 405,838 units.
The fact that BMW has a broader dealer network in China, helps the automaker reach more customers in the country’s third- and fourth-tier cities, therefore increasing sales. BMW has 343 dealerships in China, while Audi has 295.