BMW tries to seize luxury market with 5 Series LiUpdated: 2013-09-30 08:07
Sales performance of the X1 has been so strong that the company currently cannot produce enough to meet the market demand, he said.
The company is ramping up production at its facilities and by the end of this year, combined capacity of its two vehicle plants in the northeastern city of China will reach 300,000 units a year, he said.
A new engine plant is now under construction there and is set to be operational in 2016.
The aggressive expansion anticipates an expected boom in premium car consumption throughout the country, although the market has slowed down from the torrid pace of between 40 to 70 percent growth in previous years, Kastner said.
This year the premium car market will see growth in the low double digits, but compared to the rest of the world, the market here is growing at a fast pace, he said.
He said China's middle-class population is growing rapidly, among whom there's huge potential in consumption of premium cars.
Another indicator he provided is that premium car sales now account for about 9 to 10 percent of the overall car market in China, while the proportion is around 13 to 14 percent in the West.
"Both the growth in the customer base and in the share of premium car consumption together give us confidence that there will be growth," he said.
Despite the positive outlook, competition in the local market is increasingly fierce now that almost all the premium car brands have a presence here now.
The three dominant German premium brands still hold the majority of China's premium car market, but enterprises from other parts of Europe as well as the United States and Japan are eagerly seeking to expand their territories.
Kastner said that he is aware of many stories of brands - not only in the auto industry but also in other sectors - that were once very successful but eventually failed to remain competitive.
"The market moves fast, and there are people coming up who are not even well known in the industry before, and they take your market share away," he said.
"We are working very hard so that this will never happen to us."
He said that the company will not be complacent but will keep climbing.
"Product launch is a start instead of an end. We must always make efforts to provide customers better products and services. This is what keeps you successful."