BMW will start China car-leasing business in 2012

BMW plans to launch a car-leasing business in China next year. This strategic move of opening a leasing business and a new finance arm will help BMW boost their presence in China’s fast-growing luxury sector.

Friedrich Eichiner, a member of the BMW finance management board said: “Based on our experience in other markets, we see great potential for development.”

A research by J.D Power & Associates shows that  for this year alone, it is expected that the luxury cars sales in China will increase to 530,000 units. In 2015, it is expected to multiply to 1.1 million units if the current 20% increase pace is maintained.

BMW confirmed that they already got the approval of China Banking Regulatory Commission to set up an automotive finance company. BMW Automotive Finance China Co. will be 58% owned by BMW AG. The remaining 42% will be owned by BMW’s Chinese partner, BMW Brilliance Automotive Holdings Ltd. Operations is expected to start before the year ends, according to Kirk Cordill, its chief executive officer.

BMW expects that the new car-finance arm will account for almost 10% of its annual sales in China in 2012. This will ultimately rise slowly over time.

For the first eight months of 2010, BMW sold 106,000 units in China, definitely way beyond their expectations. Ivan Koh, president of the BMW’s China operations said that the dealership in China will expand to 200 locations.

Source: Autonews