[Win]

Thanks to Trump ✊🏻

Manufacturers could care less about what YOU pay for YOUR car - capitalism isn't based on "fairness" *ahem*

They care about profits, forced technology transfer, respecting patents, intellectual property, market penetration and.... common-law (of which doesn't exist nor is experienced within china)

[///M TOWN]

Originally Posted by Win

...
Manufacturers could care less about what YOU pay for YOUR car - capitalism isn't based on "fairness" *ahem*
They care about profits, forced technology transfer, respecting patents, intellectual property, market penetration and.... common-law (of which doesn't exist nor is experienced within china)

Vote with your wallet.

China is a driving force and to ignore it regardless is a kiss of death.

[yco]

i dont know why i but also felt like BMW ll make something like a sub brand one day.. which can be really fun..

[TemjinX2]

Originally Posted by Flying Ace

this makes no sense in the context of what's happening here. If anything, BMW is benefitting from the relaxing of the law in China...

The majority of the BMW suvs were US made in the south carolina plant and exported to europe and china. BMW was the largest exporter of US made vehicles for a long time because of this.



They were exporting US made BMW suvs to china...GM already has factories in china and so just make them domestically...ie they dont get hit with import tariffs.

The investment is BMW being pragmatic and using that money to invest in upgrade or opening factories in china to make SUV's to avoid potential higher tarffis on US made goods from the trade war.

[TemjinX2]

Originally Posted by Z K

The cars built in China is mainly for Chinese and other Asian consumption.

It makes no sense to manufacturer the cars in the USA and ship them to China. Labor is cheaper in China and BMW has a bigger profit on the cars as they have a larger margin on the Chinese made cars. It can also be sold cheaper to Chinese customers because there is no import tax on the Chinese made cars.

Try buying an imported car in China... even something as basic as a Toyota Corolla costs 2-3x the cost in China as it is in the USA. That's why Chinese customers who come to the USA think everything is so cheap. You can buy a luxury car for the price of a basic econo car in China!

chinese labor isnt as cheap as you think..chinese cost of labor has actually been raising substantially last couple of yrs, and US labor wages has been staggnate since 2006 when adjusted for inflation.

Even lot of chinese companies has been outsourcing to countries like vietnam and banglodesh because of the cheaper labor.

Also when you build a car in china you have to share your profits with your chinese partner.

Most businesses prefer to keep 100% of profits instead of 50%. Also these cars are being sold to the rich segment of the population. Rich people in china as just as rich or more rich then people in the United States. China surpassed the united states in the number of billionaires years ago. If you can afford a 100k car, most likely you can afford a 125k car. BMW has enough brand equity to demand those kind of prices, you cant do that with a corolla or chevy.

[Flying Ace]

Originally Posted by TemjinX2

The majority of the BMW suvs were US made in the south carolina plant and exported to europe and china. BMW was the largest exporter of US made vehicles for a long time because of this.



They were exporting US made BMW suvs to china...GM already has factories in china and so just make them domestically...ie they dont get hit with import tariffs.

The investment is BMW being pragmatic and using that money to invest in upgrade or opening factories in china to make SUV's to avoid potential higher tarffis on US made goods from the trade war.

Sure...if Brilliance actually makes a SUV...

[Flying Ace]

Originally Posted by SeanWRT

I'm kinda surprised how Americans interpret this and think all about the threat the rest of the world poses and look only at bad side of them.

It's really not that complicated - Beijing put a 50% maximum share restriction for foreign automaker in domestic market and now lifts it to promote investment and technology. BMW sees the benefit and wants to increase the share of the BMW-Brilliance as a highly profitable joint venture. BMW group even threatened to work with another Chinese company if Brilliance do not agree to sale of its share. The same drama is happening with VW/Audi and its Chinese local partner.

The impact on USA or the rest of the world? Minimal. Because imported cars in China are too insignificant. Plus Chinese have a very firm belief that the best cars are made in Europe. The most that get imported has a price tag starting from 500k rmb (73k USD). For example, M3 msrp is one million rmb (147k USD). These cars are for the top 0.01% richest, accounting for next to nothing in term of total sales.

BMW-Brilliance already produced SUVs, the long wheel base version of the new X1. And that is a heck of car, selling like hot cakes, it's literally bigger and more practical than old X3. That long wheel base X1 (44~66k usd) is the BMW SUV that gets sold in China. It's not made in USA either or not BMW holds 75% of BMW-Brilliance.

Will BMW make X5 in China? Let us Chinese worry about it. X5 starts from 750k rmb or 110k usd. Not many of them get sold actually. Even if they do get made in China, the sales are too small to have an impact on Carolina plant. And most of us only pay 500+k rmb for something that is not made in China.

BMW is not making M car and 7 series in China and ship them to USA. It'd lose them the entire global market. You guys easy. Not a single one of us agrees with that either.

Also to add, we're talking about 2 countries consumers with 2 different tastes in cars. I don't see the X5/6/7 cars getting popular in China. And this is why a Chinese factory has minimum impact in the near future. Chinese just buys different types of cars.

When I was in China back in 2007, I went to an auto show and asked a Chevy dealer rep whether he sells Corvettes. Puzzled look, scrambles to the back, consults with others and then comes back and tell me "special order". Until I mentioned it, he himself has never even heard of the car, let alone if I mentioned the Yukon

[TemjinX2]

Originally Posted by Flying Ace

Sure...if Brilliance actually makes a SUV...

what you mean? Foreign companies just need a chinese partner to avoid import tarriffs.....the chinese partner doesn't need to know anything about how to build the suv.

BMW is just going to open a new plant...most likely to build SUV's and electric cars. Since the chinese government has huge subsidies for electric cars. The south carolina plant makes the majority of the BMW suv's for BMW...this will take volume away from them, so it'll will reduced the amount of over time and workers needed for that plant.

[TemjinX2]

Originally Posted by Flying Ace

Also to add, we're talking about 2 countries consumers with 2 different tastes in cars. I don't see the X5/6/7 cars getting popular in China. And this is why a Chinese factory has minimum impact in the near future. Chinese just buys different types of cars.

When I was in China back in 2007, I went to an auto show and asked a Chevy dealer rep whether he sells Corvettes. Puzzled look, scrambles to the back, consults with others and then comes back and tell me "special order". Until I mentioned it, he himself has never even heard of the car, let alone if I mentioned the Yukon

actually sales in suvs and cuvs has been going up in asia and europe. The US is not the only one on the cuv, suv craze. Most auto manufacturers try to plan at least 5yrs or more ahead.

[jondaman]

Originally Posted by waffle792

What will happen to the us plants? layoffs?

Keep the trade wars up, definitely.

But Trump is meeting with Xi in couple weeks, hopefully the dummy come to this senses.

[firevincen]

http://www.brillianceauto.com/invest...81011A_eng.pdf

Page 4 under New Investments: localiazation of X5 and BEV vehicles (iX5) by 2022.

Over the past ten years, SUV became super popular in China and manufacturers started to produce small-mid SUV’s in China. Models like X1 and X3 now have long wheel base versions tailored for Chinese market. Mercedes produces GLA and GLC’s in Beijing and others like XC60, Tiguan, Ford Edge, Evoque...etc are all made in China. For high end SUV’s, people have the option of buying parallel imports when Chinese government encourages such business when they setup free trade zones in more than eight cities starting 2016.

A parallel imported X5 costs roughly 20% less than its MSRP in China but you lose the warranty. With the new tariff parallel import dealers are hurting and I believe BMW has a hard time moving those high end SUV’s as well.

Interestingly, Brilliance’s stock 1114.HK was down more than 27% after it resumed trading on Oct 12th, the day after the announcement.