'Production follows demand' is the mantra BMW executives recite when asked about the wisdom of their planned luxury car venture with Brilliance China Automotive Holdings in Shenyang, Liaoning province.
At a regional conference in Singapore this week, BMW board member Michael Ganal predicted the project, with an initial annual capacity of 30,000 units, would receive its final government approvals 'within the next few weeks' and begin production by December.
Executives point to the United States, where BMW opened a factory after demand reached a critical mass of about 60,000 vehicles a year. Today the US accounts for about one-quarter of its million sales a year.
On the mainland last year, however, BMW sold just 6,677 vehicles - up 62 per cent on 2001 but still accounting for only 8.5 per cent of its Asian sales and 0.6 per cent of its global sales. And, unlike BMW's main production centres in Germany, the US, South Africa and Britain, which can export to any number of countries, the Shenyang facility will only be able to manufacture for the mainland market.
BMW also owns its other global production centres outright. In Shenyang it will have to stump up tens if not hundreds of millions of US dollars (the company will not say how much) for no more than 50 per cent control - the maximum share foreign car companies are allowed even after China's accession to the World Trade Organisation.
BMW will pay more money for less equity and less control than it has ever done before because, as the Germans would say, 'das ist China'.