Luxury Carmakers Promise Greater Support for China Car Dealers

Published Date : Jul 13, 2015

Premium carmaker Jaguar Land Rover and BMW have vowed greater support for car dealers in China, following recent meetings, which includes range of measures also likely to include financial incentives.

BMW China announced the support action plan following the dealer investors’ conference held in Beijing at a national level on July 1. The company has made arrangements for supply, worked on optimum performance assessments for dealers, simpler operational process that has helped dealers for new business opportunities and expand line of sales.

As commented by Karsten Engel in a news release, who is CEO and president of BMW Group Region China, going by the principle of win-win partnership, the company is prepared to face market challenges together with dealers and work jointly to develop sustainable business practices.  

However, the German carmaker dis=d not comment on Chinese press reports that incentives and subsidies worth billions of yuan were planned to felicitate dealers’ achievements for the first half of the year, which comes out to incentives worth tens of thousands of yuan for every car sold.

As per the China Automobile Dealers Association in January, BMW has agreed to spend US$821 million in subsidies for dealers by April this year after deliberate negotiations on high returns and low volume targets.

In the first half of 2015, BMW recorded sales of 230,601 vehicles on mainland China which is of 2.5% of the vehicles sold for the same period in 2014.

Even though many dealers did not meet sales targets in 2014, amidst the slow Chinese market, and hence received only few incentives. Following this, dealers jointly negotiated with carmakers for added benefits last year.

Luxury carmaker Mercedes-Benz offered special bonus to car dealers in the end of 2014, which according to press reports was worth almost I billion yuan.