Just a few months, we reported that the Chinese premium automotive sales are starting to slow down. Today, Wall Street Journal reports that some of BMW AG ’s dealers in China are asking the Bavarians to reduce their sales targets.
Dealers have complained to BMW that its sales targets are too high given China’s slowing economic growth and an anticorruption crackdown on government officials. At the same time, the dealers are asking for higher incentives to customers in order to move the product.
Currently BMW grants dealers a 5% to 6% rebate for selling a new car as well as other performance-based bonuses.
A spokeswoman for BMW said the company is “paying high attention” to the dealers’ concerns.
The passenger-car sales in China decelerated to 9.8% in the first 10 months of the year from a 15% increase in the same period last year. Dealers say the sales environment may be even softer because the figure represents auto makers’ shipments to dealers, not dealer sales to consumers.
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BMW is said to have spent billions of dollars in their quest to overtake Audi as the No.1 premium vehicles seller in China.
The WSJ reports says that BMW still aims for a 10% growth in 2015, a figure considered too aggressive by some BMW dealers.
A BMW spokeswoman said to WSJ that the company has been pursuing sustainable growth in China. “Some dealers are facing [a] challenge,” she said. “We are in close discussion with our dealer partners to reach a proper agreement in a timely manner.”