BMW expects higher China sales in 2023 despite EV price war 

BMW anticipates increased sales in China for 2023, even amidst a price war in the electric vehicle (EV) segment and relatively muted demand in the country. The automaker's Chief Financial Officer (CFO), Walter Mertl, noted that BMW experienced 3.7 per cent growth in China during the first half of the year, outpacing the broader Chinese auto market. Mertl expressed confidence in the upward sales trend continuing.

Which segments have been impacted? 

While China's passenger vehicle sales declined for a second consecutive month in July, with factors such as economic concerns and a housing market slump weighing on consumer sentiment, Mertl indicated that the ongoing price war primarily impacted cheaper segments of the auto market, which do not include BMW's vehicles.

"We are assuming, and we are seeing this at the moment, that we will sell more this year than last year," Mertl said with regard to China, adding that the price war was predominantly affecting the cheaper segments of the auto market, where BMW is not active," said Mertl.

BMW has raised its 2023 outlook for group vehicle sales, expecting solid growth in the range of 5 per cent to 9.90 per cent. In 2022, the company's vehicle sales decreased by 4.8 per cent to approximately 2.4 million units, with Chinese sales down by 6.40 per cent to 791,985 vehicles.

Mertl acknowledged that the phasing out of grants to promote electric vehicles in Germany might temporarily affect demand but expected a return to normal conditions afterwards. BMW is working to increase the share of EVs in its total vehicle sales to 15 per cent in 2023 and 20 per cent in 2024, up from around 9 per cent in 2022.

(With Reuters Inputs)