Sime Unit Bullish on China

Sime Darby Motors is to expand further BMW dealership network.

The top-selling BMW models in Chengdu, China, retailed by Sime Darby Motors (SDM) are the 7 Series and X Series, which are the top of the range passenger cars for the German marques.

This is among the reasons for SDM’s optimism about premium and luxury vehicle sales in China, the world’s largest automotive market.

Sime Darby executive vice-president (motors division) Datuk Lawrence Lee Cheow Hock said the premium and luxury passenger vehicle segment in China had a market size of about 668,000 units or about 5% of the sedan market last year.

SDM is the automotive division of conglomerate Sime Darby Bhd and one of the largest BMW dealer groups in the world. SDM ventured into the China market in 1994 where it retails BMW, MINI, Rolls-Royce, Lamborghini, Jaguar and Land Rover marques.

Lee said this segment in China was expected to grow by 20% to 30% annually and should comprise 8% of the sedan market this year.

“Clearly, with BMW’s leading position in this market, it is timely for Sime Darby Motors to expand its presence further,” said Lee on the sidelines of the official opening of the company’s new BMW 4S (sales, service, spare parts, systems) dealership in Chengdu, the capital of Sichuan province in Southwest China.

Also present at the event were Sime Darby Bhd chairman Tun Musa Hitam and SDM chairman Tan Sri Dr Wan Mohd Zahid Mohd Noordin.

About 20,000 premium and luxury vehicles from various marques were sold in Chengdu last year.

“The demand for BMW vehicles continues to be robust. As such, a complete BMW 4S facility is ideal to serve and meet the needs of this distinguished clientele,” said Lee.

SDM has plans for more BMW facilities in China in the near future, including making a 126 million yuan (USD 19.5 million) investment in another BMW 4S centre in Chongqing city, Southwest Ch in a, in 12 to 18 months.

It is worth noting that Chengdu has a population of about 11 million while Chongqing has some 30 million. SDM’s new seven-storey BMW 4S centre in Chengdu is the largest of its kind in China with a floor area of 26,0 00 sq m. Owned and operated by Chengdu Bow Yue Vehicle Sales Co Ltd, a wholly-owned subsidiary of SDM, the new BMW 4S centre was built at a cost of 126 million yuan and employs 195 employees.

It features a two-level showroom for BMW and MINI cars and an aftersales service area with 40 work bays that can be expanded to 90 work bays should the need arises.

There are also lounge areas, BMW Premium Selection area, meeting and discussion rooms and concierge services.

SDM opened its first BMW dealership in Chengdu, the capital of Sichuan province, in December 2007.

Since moving its BMW operations to the new 4S centre in May this year, the company has seen vehicle sales improved by 40% in Chengdu.

The company’s previous showroom in Chengdu was selling up to 100 BMW and MINI vehicles per month.

SDM is competing with three other BMW dealerships in Chengdu.

“While we expect the operating landscape here to be more competitive, moving forward, we will continue to leverage on the mutual trust and respect between Sime Darby Motors and BMW AG to enhance our presence further in China.

“If we maintain our present momentum, we are confident of delivering even greater results for the Sime Darby group,” Lee said.

SDM’s BMW dealership network in China is located in Guangzhou, Shenzhen, Changsha, Haikou, Kunming, Shantou and Chengdu.

The network consists of 10 BMW 4S Centers, two service-only outlets and one showroom. SDM recorded a 90% year-on-year increase in pre-tax profit to RM441mil for the nine months ended March 31, 2011. The buoyant Chinese automotive market was a key profit generator.