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A man works at the Tiexi plant of BMW Brilliance Automotive (BBA) in the Liaoning provincial capital of Shenyang on February 17, 2020. Photo: Xinhua

BMW to make X5 SUVs in China, expanding its model lineup to fend off electric cars in the world’s largest vehicle market

  • BMW will add the X5 to the lineup of vehicles it makes with its Brilliance China Automotive Holdings venture in Shenyang
  • The Shenyang-made X5 will cater to the tastes and preferences of Chinese customers, including a long-wheel concept for them to be chauffeur driven
BMW

BMW will assemble the X5 mid-size sports-utility vehicle (SUV) in China, shifting more of its global production capacity to its biggest single revenue source as it doubles down on growth in the world’s largest vehicle market.

The X5 will be the “most advanced and sophisticated” premium vehicle assembled in northeastern China’s Shenyang city by the German luxury carmaker and its partner Brilliance China Automotive Holdings since they began their venture in 2003, BMW said. BMW-Brilliance already makes the X1, X2 and X3 compact SUVs, as well as the 1, 2, 3 and 5 Series sedans in the Liaoning provincial capital.

“We have submitted an application to the authorities,” BMW said in a statement to the South China Morning Post. “Once approved, the X5 will become the new flagship of our local production fleet, marking a new milestone in BMW’s commitment to China.”

China, which surpassed the United States in 2009 as the largest vehicle market on the planet, is the key battleground where global carmakers thrive or die, especially in the epic battle between electric cars and automobiles powered by internal combustion engines (ICEs). The petrol-guzzling X5 is mostly made at BMW’s Spartanburg plant in South Carolina, with an import price of 699,900 yuan (US$110,014).

The BMW X5 M on 16 April 2015. Photo: SCMP

BMW did not disclose the production start or the retail price of its China-made X5, but analysts expect the vehicle to start rolling off the Shenyang assembly in early 2022.

The Shenyang-made X5 will be custom-made for Chinese customers, catering to their tastes and preferences, including a long-wheel concept with a roomy back seat for them to be chauffeur driven. Local production could knock at least 10 per cent off the car’s sticker price, translating to 600,000 yuan for the basic X5, analysts said.

New cars are seen in a parking lot of the Brilliance factory in the Liaoning provincial capital of Shenyang on July 17, 2017. Photo: AFP

That price puts the X5 in direct competition with Audi’s imported Q7 SUV, priced at 701,800 yuan. It also puts BMW in the position to fend off Li Auto’s all-electric full-size SUV, code named X01, when it goes on sale in the second quarter of 2022.

“Local production [can] offer local customers a cheaper China-made X5, which will help BMW increase its market share in the premium car segment,” said Eric Han, a senior manager with Shanghai-based business advisory Suolei. “Thousands of BMW fans have been expecting the model to be produced here.”

China’s vehicle sales rose 6.1 per cent to 18.04 million units in the first 11 months of this year, according to the China Passenger Car Association. Sales are poised for the first annual increase since 2017, recovering from three successive years of declines, as more owners ditch their petrol guzzlers for smart cars powered by electric battery packs.

The EV boom has attracted nearly every global ICE assembler from Audi to Volkswagen to add an electric version to its line-up, as they compete with an estimated 500 EV brands for market share. Tesla remains the market leader in China, where young drivers have a penchant for sophisticated in-car entertainment systems, and driver assistant technology.

Tesla is facing increasing competition from a trio of US-listed Chinese EV makers NIO, Xpeng and Li Auto, while traditional carmakers are also entering the fray.

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