By on November 24, 2011

We have always maintained that what will get exports of Chinese cars in high gear is not Chinese cars, but foreign cars. Foreign cars, made by joint ventures in China. Nevertheless, I admit my high surprise to read, from China Daily to Chinacartimes, that BMW will export Made in China cars. And not their bread and butter 3 series.

BMW will become the first foreign luxury car manufacturer to export China-made cars when it begins shipping locally produced long-wheelbase 5 Series sedans overseas at the end of the year.

BMW will start exporting the cars, which are made jointly with Brilliance, as early as December, destination unknown. Said Christoph Stark, CEO of BMW Group Region China:

“We will find some markets, maybe in the Middle East, somewhere in Asia, or some other markets that welcome the products where we can test this export effort. The main market of course is here (in China), because we can’t even supply enough here.”

BMW’s new 5 Series sedan has sold real well in China, especially in the long version, which is a Chinese peculiarity. The man who has everything also has a driver in China. And he wants room in the back.

Stark announced another first: BMW will build engines in China. A Twin-Power Turbo four-cylinder engine will be made at a joint venture factory, to go into Made-in China X1 and other models.

Hold the usual comments: The quality of cars made at joint venture factories in China is usually indistinguishable from imports. As long as the cars are made from foreign plans, with foreign methods and foreign QA, they sometimes exceed the imports.

 

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46 Comments on “It’s Starting: BMW To Export Made-in-China 5 Series...”


  • avatar
    Tosh

    So BMW is making an ‘export quality’ Chinese car for the Chinese and “maybe some other markets”? That actually makes great sense! I can see BMW selling these in India and getting one over on Tata (Jaguar).

  • avatar
    orick

    How long before these come over here to NA or go to Europe, I wonder. 5 years?

    • 0 avatar
      stryker1

      Good freaking luck with that. People willing to shell out that kind of cheddar on a car aren’t going to like wondering if their 5 series is a German-born uber-motor or a Chinese made-alike. It doesn’t matter if they’re 99% the same. As in the Guitar Business, Made in is a big deal when you start talking about higher end, higher dollar items.

      • 0 avatar
        Dynasty

        Exactly. And not just the guitar business. It’s any business that sells a higher end product. From cookware, to audio gear, to musical instruments and so on.

        However, unfortunately or not, with the walmartification of America, only the purists will balk at a made in China BMW.

        Generally for me, when I have money to burn and want a higher end product, it really irks me when I see an American brand selling for a premium and there is a made in China label on it. And for the same money I can get something made in W. Europe that wasn’t produced for .35 cents an hour and the earth wasn’t scorched and poisoned creating it.

      • 0 avatar
        PJ McCombs

        People seem to have little problem paying ‘premium’ prices for ‘premium’ brand electronics when they’re made in China. Apple…?

      • 0 avatar
        wsn

        Dynasty: “And for the same money I can get something made in W. Europe that wasn’t produced for .35 cents an hour and the earth wasn’t scorched and poisoned creating it.”

        If BMW is using the same manufacturing process on both continents, the level to which the earth is poisoned is about the same. And no, BMW doesn’t pay 35 cents/hour for Chinese labor.

      • 0 avatar
        Volt 230

        Oh yeah, great news while unemployment here and in Europe continues to run rampant , keep making every thing in China, “Wake up Western people”!!!!!!

      • 0 avatar
        wsn

        Volt 230, people who squeeze plastic parts into a car frame shouldn’t be paid $60k in the first place. It should be a $20k job in NA, and currently sits at $5k in China.

      • 0 avatar
        Dynasty

        PJ McCombs: “People seem to have little problem paying ‘premium’ prices for ‘premium’ brand electronics when they’re made in China. Apple…?”

        Many people do. But they don’t have a choice. The only electronics made in this country are from very small scale boutique manufacturers, and precision equipment companies. 99.8% of the consumer electronics market is imported goods. If I were to buy a new Apple product vs a Dell, the country it is made in has no bearing on the equation since neither are manufactured in the US.

        This is like the saying Henry Ford said that you could buy the Model T in any color you like along as it was black. Then someone making a statement that no one has a problem with buying a black model T. Well, how do you know if they do or not? They don’t have the choice to get one that is not black.

        wsn: “If BMW is using the same manufacturing process on both continents, the level to which the earth is poisoned is about the same. And no, BMW doesn’t pay 35 cents/hour for Chinese labor.”

        The operative word is if. There is little to no enforcement in China. Unless BMW is a totally altruistic company, they will cut corners to reduce costs.

        How much does BMW pay per hour in China compared to Germany?

        If this 5 series is exported from China to the West, at what price point will it sell? Will it be sold for roughly the same as the German produced version in order to maintain brand cache? If so, BMW will be in a position to eliminate its homegrown workers and increase its profits. This is all good on paper, but has far reaching effects on the social strata of a society.

        wsn: “Volt 230, people who squeeze plastic parts into a car frame shouldn’t be paid $60k in the first place. It should be a $20k job in NA, and currently sits at $5k in China.”

        Then based on that logic, people who make 20K a year pouring espresso into plastic cups should be making 5K a year.

        I don’t know what your job position is. But I would bet with 80% certainty there is someone somewhere in the world who is ABLE and would be more than willing to do it for 1/3rd what you are currently compensated at.

        And let’s say that happened hypothetically. And you are in a situation where you need to buy a vehicle. Of course now you cannot afford to support your American brother or German cousin across the Atlantic and buy a product from his factory on his “inflated” salary. So that forces you to buy a Made in China vehicle because the workers there only make 5K a year.

        But it’s not just you. It’s millions of American who have had their living wage jobs taken from them because what they do is just not worth what they are getting paid. So everyone is buying made in China cars. So BMW, GM, Ford, et all have all moved 98% of their production to China to take advantage of the cheap labor.

        The countries tax base erodes, the majority of jobs are in the service sector, and there are only enough good paying jobs to go around for about 20% of the population.

        Think it can’t happen? It already is.

      • 0 avatar
        JJ

        Wouldn’t have to wonder…The VIN number gives away the place where the car is build.

        (Yeah I know it’s not the point).

    • 0 avatar
      CT Pete

      I received a BMW survey last week, and was wondering why they asked about perception of Chinese made cars. They are already trying to determine if the Chinese 5 Series will be accepted here.

  • avatar
    acuraandy

    Be that it as it may that it makes sense in emerging markets, ill be damned if I EVER buy a Chinese built car; I don’t care if its a BMW, General Mistake or a two door ‘Speck’. Just sayin…:) Gobble gobble!

  • avatar
    jimmyy

    This needs to start with a Detroit automaker. It is unfortunate UAW rules will allow foreign automakers to deliver made in china cars to US shores before Detroit. If Detroit is unable to be first with made in china products, not even a Toyota style recall attack can stop the end of Detroit.

  • avatar
    carguy

    Makes perfect sense to me. European car makers need to escape high labor costs and a strong Euro to remain competitive and preserve their margins. I also believe that quality will not be an issue – those who remember the 70s will recall that “Made in Japan” used to be a byline for poor quality and poor craftsmanship. I’m sure with BMWs guidance that will be churning out the 3 series there before the end of the decade.

    • 0 avatar
      Dynasty

      I think prior to Japan’s destruction in WWII, they produced higher quality products. Just look at some of their military tech in WWII (although I bet some of it was German based)

      Japan has been long known for high quality metal and woodworking for centuries. It just took three decades after WWII to get their act back together and begin producing products catered to western tastes.

      I’m not sure China has ever been known for high quality goods and wares aside from textiles and potteries.

      • 0 avatar
        wsn

        Each nation has it’s own strength and weakness. Japan and Germany are very much alike in that they improve things and pay attention to detail. China is very much like the US of A, they invent things and then leave them for other to improve.

        If you like to talk about military tech, consider that when the Japanese were still painstakingly improving their battle swords, the Chinese invented gunpowder. China never lacked talent, but lacked a mature and evolving ruling class.

      • 0 avatar
        Dynasty

        I’m really not much of a military buff.

        But gunpowder or no gunpowder, Japan always seemed to roll into China and have its way.

        Yes I’m aware that centuries ago China discovered a lot about chemistry, and the traditional Chinese medical practice is top notch. I would much rather go to a TCM practitioner trained in China than a top notch Japanese doctor who knows the best that western medicine has to offer.

      • 0 avatar
        wsn

        Dynasty, Japan was able to invade China, simply because Japan started industrial and political transformations earlier than China, and it has nothing to do with product quality.

        Germany has always been able to “roll into” other European nations, but that doesn’t mean those nations don’t offer quality products. Even during WWII, MB is superior than GM (not to mention the crappy Soviet products), but it doesn’t matter, the Allies won.

      • 0 avatar
        Dynasty

        wsn: “but it doesn’t matter, the Allies won.”

        The Allies won because Hitler did not listen to his Generals.

    • 0 avatar
      Dynasty

      wsn: “and it has nothing to do with product quality”

      Perhaps. But it has everything to do with the spirit of the people, and the pride they take in their nation, which is reflected in the quality of their products.

      • 0 avatar
        Robert.Walter

        But your statements seem to be built on a premise that something predestines a people to remain statically ahead or behind or capable or limited in their abilities or results based on past performance. The rise an fall of nations puts paid to such a notion. Technology transfer like any kind of learning could never happen if a people or organization were condemned to a future just like their past.

  • avatar
    stuki

    From what I understand, the entire raison d’etre for the LWB 5 in China, is that some people are precluded from buying a 7, because their position in some corporate hierarchy mean they have to leave room for their “boss” to preen.

    Aside from what such petty vanity, on a scale grand enough to drive luxury make model planning decisions, says about the risks for a hard landing in China; where else are these kinds of concerns present? Other Asian economies? In the sane world, people who want more space than in a 5, just buy a 7.

    • 0 avatar
      tekdemon

      Well there’s a long wheelbase 3 as well along with other long wheelbase models of just about everything. There’s also long wheelbase models of the top cars so it’s not just about leaving room for your superiors, people in China pretty much all have drivers if they have money.
      I think the other thing to keep in mind is that the taxes make all these models so much more expensive in China so a 7 series becomes near impossible to obtain enough money to buy. Maybe the 5 LWB is just an excuse for BMW to let people get the same kinda space as a 7 series while paying a price with taxes that’s closer to the 7 series price elsewhere.

  • avatar
    Lorenzo

    The key is that it’s not a normal 5 series, but the long wheelbase model BMW sells nowhere else. The markets mentioned probably have enough demand for chauffeur-driven (or bodyguard-driven) 5 series to create another niche for BMW that doesn’t impact the rest of their market.

    • 0 avatar

      That’s true. The 5 series LWB model is and will be a niche product. Looking at the limited production capabilities BMW has in Germany and it makes sense.
      On the other hand: when they have the know-how for LWB cars in China, why shouldn’t they experiment with SWB or middle-wheelbase models?

  • avatar
    Toucan

    That’s absolutely scary and terrifying news and a serious mistake BMW makes. It will result in a very prompt end to any manufacturer offering advanced, premium vehicles.

    Exactly the same scenario was practiced in high speed rail technology. Bombardier and Siemens of Europe and Kawasaki of Japan all were forced to transfer and share their technology with local Chinese venture partners to be allowed market share. It was in 2003. Just in 2010 the Chinese put into service their fully domestically designed and built train set which rendered competition completely obsolete, being faster, quieter and cheaper.

    http://en.wikipedia.org/wiki/File:Chinacrh380aatchangzhou.jpg

    What’s going to happen when the Chinese enter bids on foreign rail markets with their offer requires no commentary.

    But what’s especially relevant is that the established rail companies were lured by a single bid event, single allowance and profit perspective lasting just a couple of years. I see the same pattern here. How much is BMW going to earn on these exports due to lower production costs? And how many MORE cars will the sell in China after production starts?

    The process will take a bit more years as in case of the rail because of the branding effect, which is completely irrelevant on the train set market but will protect the premium manufacturers for s short period of time. But expect soon a genuinely Chinese car which will share or even overbid the BMW features and specifications for much outbid price. This will mean one thing for the western automotive industry: death penalty.

    • 0 avatar
      wsn

      Toucan “What’s going to happen when the Chinese enter bids on foreign rail markets with their offer requires no commentary.”

      Just do the same. Ask them to transfer technology or else.

  • avatar
    daveainchina

    I wonder if they will try bringing this to the USA. From a family perspective this is actually a better car than the regular 5 series. And no matter how many people will scream not enthusiast, I guarantee you, most people who buy your average BMW could care less and would like the extra room in back for kids etc.

    The really hard thing is that, until I walk around and read the numbers on the back I have a hard time telling if it’s a new normal wheelbase 7 series or a long version 5 series. I’m getting better but it can be very difficult at times.

    As for the comment about people having drivers because anyone who is anyone has one, is something of a joke. When you can have a driver in a city such as Shanghai and pay him about 4000 -7000 rmb a month, wouldn’t you have one?

    Having a driver for anyone who is middle class and up in terms of income is a joke, don’t believe that it is difficult for many Chinese.

    These cars a built fine, there is nothing wrong with them quality wise. Remember all your iPhones are made in China and I don’t see people complaining about that quality.

    @Toucan You are absolutely right about the trains. China basically has no ethics throughout it’s society and they will exploit any rule and any method they can to their advantage.

    • 0 avatar
      Toucan

      > I wonder if they will try bringing this to the USA.
      > From a family perspective this is actually a better
      > car than the regular 5 series.

      They will never do. There is plenty enough space in the back for family needs in this already pretty sizable. No need to spoil its dynamics for more.

      > China basically has no ethics throughout it’s
      >society and they will exploit any rule and any method
      > they can to their advantage.

      Exactly. Manufacturers of advanced goods should even give up the Chinese market, accepting lower profits but ensuring (longer) survival. Otherwise it will be like entering a dragon’s den. Lured by a small cake, you will be eaten.

      • 0 avatar
        Dynasty

        Its the lure of short term gains at the expense of long term health.

        When the CEOs of these companies put together their powerpoint presentations, all the competition is doing it so in order to stay competitive they must also.

        Its a race to irrelevancy.

  • avatar
    Sothy

    The ‘short wheel base’ 7-series is 5072mm (199.7in) long according to wiki. (LWB is 5212mm (205.2in)).

    The LWB 5-series is 5039mm long according to BMW China’s website. That is a difference (between the SWB 7-series and the LWB 5-series of 33mm, not that much more than an inch really).

    The 5 series and 7 series ‘share a platform’, the LWB 5-series has some of the same engine options as the 7 series, etc. Why should one get the 7-series?

    It costs a lot more, but (I presume) that you get less rear-seat legroom, and more front-seat legroom. Unless you are a (very?) tall driver, wouldn’t the 5-series be better at transporting 4 (or 5) adults (or a family with car seats, etc.)?

    There’s a reason why we don’t get manual diesel hatchbacks in North America, but I don’t think that the same reason applies to the LWB 5-series…(ie. I’m guessing that it has to do with stealing sales away from the SWB 7-series).

    • 0 avatar
      wsn

      “The 5 series and 7 series ‘share a platform’, the LWB 5-series has some of the same engine options as the 7 series, etc. Why should one get the 7-series?”

      Because as a number 7 is greater than 5 and that the 7 is more expensive. Yes, people buy expensive cars just because they are expensive (so that will distinguish themselves from less wealthy people). Otherwise, a Camry is all you need for safety, comfort and power. I know the 5 series is supposed to handle better than a Camry. But then again, 90% of real 5 series owners drive the car just like a Camry anyway.

  • avatar
    MrWhopee

    Is there really a demand for a Chinese made BMW outside of China? How much cheaper they’re gonna be? The price of a Camcord? Now if it’s the same overpriced price as German-build or American-built BMW’s, who would want that? I can understand if some low-priced cars eventually are made in China and priced accordingly, but luxury cars whose primary selling point is being a German car?

  • avatar
    niky

    German cars made in places that aren’t Germany? Like Brazil where they used to build MINI engines or the US where they build X5s? Right. No one’s going to buy that!

    But seriously, it’s about damn time they started selling the LWB 5-series elsewhere. It’s a good idea, and probably didn’t cost as much to engineer as the horrendously ugly 5GT. Having sampled the new 5-series, I can imagine it appealing to more buyers with a LWB version, especially if that LWB version is cheaper than the 7.

  • avatar
    KitaIkki

    People pay premium prices for Apple products. Every single one of them says “Designed in California / Assembled in China” When BMWs start showing up with “Designed in Bavaria / Assembled in China” there may be some grumbling, but people will soon get used to it. It’s the BMW brand that matters, not where the car is put together.

    • 0 avatar
      Dynasty

      “It’s the BMW brand that matters, not where the car is put together.”

      A large portion of the BMW brand IS where the car is put together.

      Apple has never been known for its “American craftsmanship”

      Would you buy made in China “Amish furniture”

      • 0 avatar
        krhodes1

        Except that a large proportion of the BMWs sold in the US are already NOT made in Germany, so this arguement simply does not hold water.

        The X3, X5, and X6 are all made in South Carolina, USA. Z3s, and Z4s used to be, though I think Z4 production may be back in Europe now. A very large percentage of 3-series sold here are made in Pretoria South Africa. Both locations have FAR lower labor costs than Germany. Though probably rather higher than in China.

      • 0 avatar
        Dynasty

        Good point.

        But where I in a position to buy a BMW, I’d much rather prefer a made in Germany model vs. one made in China.

        I might be in the minority though.

      • 0 avatar
        wsn

        Dynasty, how many Bimmers do you currently own?

        Exactly.

      • 0 avatar
        graham

        The South African-produced 3-Series have generally been at or above build-quality of the German-produced examples. However, BMW has typically only imported the SA-made models to the US market to be used as dealer loaners and “demo” models. Of course these cars are all sold to consumers sooner then later, so there are a fair number of them out there now. My guess is that BMWNA is reluctant to market a “premium” model that’s made in SA, but on the other hand they have no qualms about putting them front and center as dealer service loaners and demo cars, so they must be confident in the quality.

      • 0 avatar
        Dynasty

        wsn: “Dynasty, how many Bimmers do you currently own?

        Exactly.”

        I have zero. And that is because I think they are an overpriced disposable item with high maintenance costs. Not because I couldn’t swing the lease on one.

        That being said, I’m really not sure where you are trying to go with that question and thanks for answering for me though :).

        But I can play this game too.

        How many Rolexes do you have? I have one. Would I buy one if it were made in China? Nope.

        How many Italian suits do you have? I have some. Would it still be an Italian suit if manufactured in China?

        How much Danish furniture crafted out of solid teak wood do you have? I have a house full. Would I have bought it if the Danish crafstmen were outsourced to low price factories in China? Nope.

        Where I’m going with this is, it does matter where a product is manufactured.

        So just out of curiosity, what was the point of asking me how many Bimmers I have?

      • 0 avatar
        niky

        Automobiles in that price range aren’t hand-crafted items… so there’s little point in bragging about where they’re made. It’s obviously different if it’s a Rolls or Jaguar with a handcrafted wood console.

        Face it, that market is largely unconscious of where the product is actually made… which is why the X5 and MINI have been great successes for BMW.

        Will “Made in China” be an issue for BMW NA? Obviously. Will it be a huge issue? Considering most buyers don’t know their Japanese and German cars are made in the USA and their “American” cars are made in Mexico, likely not.

  • avatar
    Robert.Walter

    “The main market of course is here (in China), because we can’t even supply enough here.”

    What b.s. if you can’t satisfy demand where you produce, and are the looking to sell some of that production elsewhere, then you are selling it too cheaply. or you are considering making a major investment to expand capy and the foreign mkt studies are a hedge against overproduction.

    My take is that they would like to produce this car in one plant to avoid double investment and the inevitable quality niggles coming from too much variety and lack of specialization.


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