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Published on February 1, 2008

The group, which consists of the BMW passenger-car and motorcycle brands, as well as the Rolls-Royce and Mini brands, sold 159,365 units in Asia last year, up 12.16 per cent from 142,084 in 2006. In Thailand, BMW sales plunged 41 per cent to only 1,821 units last year.

The company is expecting continued sales growth in the region and has targeted sales of 200,000 units by 2012, said Stefan Krause, head of sales and marketing at BMW.

"We expect BMW Group sales to continue its successful course in 2008, both in Asia and worldwide. Provided that the Asian continent continues its positive economic development, we plan to sell 200,000 vehicles here by 2012," he told Asian journalists at a Tokyo press conference.

"We have achieved our medium-term goal for this region one year ahead of schedule, which is selling more than 150,000 vehicles by 2008. This is a target we had announced in Singapore three years ago," Krause said.

Amid a sharp decline in Thailand's luxury-car market, BMW has been forced to embark on a comprehensive reorganisation of local marketing and production structures, especially in raising the level of flexibility at its Rayong assembly plant.

Krause said the way BMW's operation in Thailand was set up would not enable growth in the present market conditions.

"Therefore, we took a decision to focus on restructuring and looked into all aspects: processing, retail network, training and the factory," he said.

It is BMW's intention to catch up with archrival Mercedes-Benz in the Thai market, Krause said.

"We will give Thailand the necessary investment, products and technology to chase the market leader."

David Panton, the BMW Group's director for the Asia-Pacific, Africa and Eastern Europe, said the company could have improved its Thai operations one step at a time but decided to do it all at once.

"[BMW Group Thailand president] Michael Kordis was sent to Thailand to carry out the restructuring," he said.

Kordis said improvements in Thailand had led to a remarkable rebound last month, with 131 units sold.

"January sales have rebounded by 132 per cent in a month which is considered off-season," he said.

Despite the drop in BMW sales, the iconic Mini brand was able to maintain its momentum in Thailand, with 350 units sold, up 26 per cent.

Krause said that the BMW manufacturing plant in Rayong province was originally designed for a high production volume - 8,000 units per year in one shift - with exports to Asean countries under the Asean Free-Trade Area (Afta).

"We have not reached the optimal point of production," he said, adding that the restructuring at the plant, which assembles the 3-, 5- and 7-Series, as well as the X3, had made it more flexible and optimised for a lower production volume, without needing to lay off any employees.

Training and changes in processes has made this possible, he said.

Krause also said BMW was restarting production of the 3- and 5-Series in Malaysia and the 5-Series in Indonesia, since the Afta scheme was not working out as expected.

"It's not 'real' free trade, and we need to assemble the cars in their respective markets," he said.

Mercedes-Benz is the best-selling brand in the Thai luxury-car market, with a 55.9-per-cent share. Last year, it maintained it leadership for the seventh consecutive year, with sales of 4,024 units, up 15 per cent from 2006. Its strongest sales came from the E-Class (1,772 units), followed by the A-Class subcompact (630) and the flagship S-Class (548).

But in Asia as a whole, BMW is the leading brand, with 139,223 units sold last year, up 11.75 per cent from 124,582 units sold in 2006.

The Mini brand also enjoyed growth in Asia last year, with sales reaching 19,957 units, up almost 15 per cent, while sales of Rolls-Royce cars rose 30 per cent, with more than 50 per cent sold in China alone.

In Japan, where the total market declined 5.8 per cent, the BMW Group sold 61,116 vehicles, down 1.7 per cent from 2006's record-breaking volume, while sales in China reached 61,098 units, up 36.6 per cent.

In Malaysia, BMW sold 3,300 vehicles, down 3.9 per cent, while Mini sales rose 9 per cent to 185 units.

In Singapore, the group sold 3,700 BMWs and almost 300 Minis.

Last year was also the company's first to do business in India, where it sold 1,387 units, with 80 per cent coming from locally assembled 3- and 5-Series models.

Globally, the group sold more than 1.5 million vehicles last year, up 9.2 per cent. Sales of the BMW brand reached 1,276,793 units, up 7.7 per cent, while Mini achieved record sales of 222,875, up 18.5 per cent. Rolls-Royce sold 1,010 units, up 25.5 per cent.

Kingsley Wijayasinha

The Nation

Tokyo