Luxury Car Makers See China Boom

By GORDON FAIRCLOUGHApril 20, 2008 11:18 a.m. WSJ

BEIJING – Luxury car makers say they expect China's booming market for up-market autos to keep growing.

BMW AG plans to expand production in China by up to 40% this year, to about 42,000 cars from about 30,000 in 2007, according to Ian Robertson, a member of BMW's management board.

"Over time, there will be more opportunity," said Mr. Robertson in an interview Sunday at the Beijing Auto Show.

Mr. Robertson, who is also chairman and chief executive of BMW's Rolls-Royce unit, said the company is also planning to open three more Rolls-Royce dealerships in China this year, raising the total to eight.

China is now Rolls-Royce's third-largest market in the world. The company sells twice cars in China as it does in Japan, Mr. Robertson said.

Shenyang Brilliance Jinbei Automobile Co., BMW AG's joint-venture partner in China, said it expects to increase its annual production capacity for BMW branded sedans to 100,000 by 2012.

Daimler AG, the maker of Mercedes-Benz, says it is now growing at roughly double the average rate of increase of China's passenger-car market overall. Sales of passenger cars rose by roughly 20% in the first quarter.

"We expect sales to continue to be strong," said Trevor Hale, a Daimler spokesman in Beijing. He said the company was continuing to "ramp up" production at its joint-venture plant in China, which has a capacity of 25,000 units a year.