For two days in Inner Mongolia, Tom Liang took a Bayerische Motoren Werke AG (BMW) X5 sport-utility vehicle up 100-meter-high sand dunes and across rocky river beds past camel cemeteries.
“Driving in the desert brings out all the best functions of the car,” said Liang, 36, who attended BMW’s first off-road terrain course held this month in Ordos, northern China. “This training opened my eyes to what my X5 can do.”
The Munich-based automaker has narrowed its market-share gap in China with Volkswagen AG (VOW)’s Audi since starting driving courses in 2006 to attract new buyers and build brand appeal. Rising numbers of wealthy Chinese are boosting sales even as overall vehicle deliveries slow this year after the government imposed purchase restrictions to curb congestion.
BMW’s share of the country’s high-end sedan segment has risen to 24 percent this year from 21 percent in 2006, while Audi’s has declined to 28 percent from 50 percent, according to Munich-based Roland Berger Strategy Consultants.
Test drives and cross-country expeditions showcase new technology and expand customer interest, said Lu Yi, head of sales and marketing at BMW’s China import unit, in a July 19 interview in Ordos.
“People want to have technology, they want to have service, and they want to have a car ready to express themselves,” said Lu. “You have to find unique new ideas.”
BMW will increase its China sales by 48 percent this year, outpacing Audi’s projected 18 percent growth, and 44 percent for Daimler AG (DAI)’s Mercedes-Benz, according to estimates by Westlake Village, California-based J.D. Power & Associates.
Total vehicle deliveries will grow about 5 percent this year after surging 32 percent to a record in 2010, according to the China Association of Automobile Manufacturers. Luxury-car sales in the world’s largest auto market will expand about 30 percent this year, J.D. Power estimates.
BMW Chief Executive Officer Norbert Reithofer raised his global sales forecast July 12 on buoyant demand from international markets. The automaker now anticipates sales of more than 1.6 million vehicles this year, up from a previous forecast of deliveries in excess of 1.5 million units.
“The brand enjoys a more favorable image among private buyers, especially younger affluent buyers,” said Chotai, who is based in London. More than two thirds of the luxury car buyers in China are under 45, compared with about 50 percent in the U.S., he said.
The carmaker topped a poll for the most desired brand in China, beating out 150 consumer names such as Apple Inc. and Cartier, according to an online survey by Hong Kong-based Clear Asia, which advises companies on branding. Mercedes was eighth on the list, while Audi came in 12th.
“Respondents say BMW is more modern, confident and ambitious than the other auto brands in the study,” said Oliver Cartwright, regional managing director at Clear Asia, whose firm surveyed 2,800 Chinese at the end of 2010. The respondents had an average age of 31 with a mean annual household income of about 80,000 yuan.
For Liang, the Ordos training has deepened his brand loyalty. He switched from an Audi A4 to a BMW 325I in 2008 after trying out for a Destination X tour.
“After I go for these events, I get more and more interested in BMW cars,” said Liang. “Whatever car I need, I will always think of BMW first.”
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