Auto Sohu:You just mentioned that your family is going to move to Beijing in three weeks. Do you think the air pollution problem will bother them? What contributions will BMW make for the improvement of the air quality here?
Mr. Engel: The air quality is a concern not only for my family but for the wellbeing of everybody. We insist that automotive manufacturers should take social responsibilities for it.
We are doing it in two directions, one is in evolutionary way by reducing the CO2 emission of the combustions on our existing cars. The CO2 emission of the existing 73 models is less than 140g.
The other direction is the revolutionary innovation, i.e. the development and application of electric vehicles. The BMW i will be available in the market soon, including electric cars and hybrid models. The CO2 emission will be substantially reduced through the revolutionary innovation.
By the end of last year, there were 5.3 million cars in Beijing, which was more than the total volume of the passenger cars nationwide 20 years ago. When I first came to China 18 years ago, I could rarely see cars on the road. The government has made great effort and imposed stricter emission standards as to improve the air quality, like the Jing V standard, which helped reduce the particulates in the air.
We should take responsibility for the environment although automotive industry is not the biggest contributor for air pollution. We believe that China will become the largest market for electric vehicles in the future. Also, we are happy to be the first premium brand to launch electric vehicle. There are a lot of revolutionary technologies on BMW i models, such as the extensive use of carbon fiber. The BMW i3 will go onto the Chinese market in the second quarter of next year.
All these moves are beneficial but it takes long time to solve it. Everyone needs to take responsibility for the sake of our health.
Auto Sohu:Local production and localization have been the focus of BMW business. Can you share with us what new models will be locally produced in China in the next 1-2 years?
Mr. Engel: There is no doubt that localization is the foundation of BMW’s success in Chinese market. The success of localization in China is also an important contributor for BMW as a successful global brand.
In terms of products, our locally produced 5 Series Li is specially designed for the Chinese market. Other models including 3 Series Standard Wheelbase and Long Wheelbase and BMW X1 also make contributions for sales growth.
The production capability of Plant Tie’xi will reach 300,000 units by the end of this year and this figure can be expanded with the development of future market. At the same time, the new engine plant of BMW Brilliance is under construction with annual capacity of 400,000 units. Our production capacity and products planning not only need to satisfy the demand of market, but avoid the risk of over-capacity. So our capacity is always lower than the market demand to maintain the balance.
Considering the large investment on the joint venture plant, we will introduce more locally produced cars in the future and discuss the possibility of each segment. We will communicate with you in due course.
Auto Sohu:We are interested in the possibility of local production of MINI. BMW said there is no any plan yet. Does it mean that there is possibility for MINI to be produced in China? If possible, when does BMW start local production of MINI?
Mr. Engel: Of course we do research and analysis about the production planning for each segment. Most of time our decision of production fits the market demand, like the locally produced BMW X1 has excellent performance in the market, which is designed for compact SUV segment.
We haven’t made any decision about local production of MINI. Any decision about localization will be critically discussed with our partners. We will communicate with you once the decision is made.
We will make the utmost of the sufficient capacity we are having now. Our Plant Tie’xi is the most sustainable plant in the world. If you have been to this plant, you will find it is very eco-friendly, such as the recycle water and use of clean energy. It is the most advanced and modern plant in the world. We ensure to make the full use of the local production capacity.
Auto Sohu:In 2011, BMW announced that the 5 Series Li will be exported from Shenyang. There is also export news for “ZINORO”. Could you please tell us the exporting sales of the locally produced models these years?
Mr. Engel: It is the first time for me to know the export news of “ZINORO”.
There were small amount of exporting models of BMW 5 Series Li, while the most important thing for us is to meet the demand of local market. The demand for 5 Series Li in China is currently higher than our capacity. We always need to arrange extra shifts to meet the market demand. The large scale export can only be realized when the capacity is far higher than the demand of local market. We haven’t seen it happened yet, so we need to make great efforts to meet the demand of Chinese market. Of course, I am satisfied with the current situation.
Auto Sohu:From the sales performance of 1st half this year, the gap of sales volume between BMW and Audi has narrowed, especially in the C-class which is the most competitive segment of Audi in May. The gap between 5 Series and Audi A6L is just 800 units. Is there any chance for 5 Series to surpass A6L in short term?
Mr. Engel: The final ranking will be decided by customers. Being No. 1 in terms of sales volume is not our goal. We have clear strategies and will strictly follow them. Audi has their strategies. We will continue to follow our strategies. Our development will be more focused on quality, brand appeal and customers’ satisfaction rather than sales growth.
The BMW 5 Series has an excellent performance in the 1st half this year and has become one of the fastest growing models in the Chinese market. It is also the leading model in its segment worldwide. I didn’t know the specific figures you mentioned, but we are happy to see the growth of a model according to the market ranking of it.