Daily Management Review

BMW Reduces Price Of Its Made In China Electric SUV To Compete With Tesla And Local Startups


BMW Reduces Price Of Its Made In China Electric SUV To Compete With Tesla And Local Startups
A price cut for all of its all-electric iX3 SUV in China by the German automaker BMW has not pitted the models in direct competition with those offered by Tesla and other Chinese startups such as Nio.
The recommended retail price for the iX3 will start at 399,900 yuan ($61,713), BMW’s website said as of Thursday. The new price is 70,100 yuan — or about $10,800 and 15 per cent lest costly compared to the original price of 470,000 yuan for the vehicles as was announced by the company in September last year.
“For its size the iX3 would be competing directly vs. the Tesla Model Y & NIO ES6 which both have starting prices substantially less than the iX3 prior to this cut, so BMW must’ve seen softness in the demand for the iX3 at that price point,” said Tu Le, founder of Beijing-based advisory firm Sino Auto Insights. “Bottom line it wasn’t competitive.”
The German luxury car maker also brought down the price for the higher end version of the iX3 by the same 70,100 yuan amount and the new price of these vehicles will be 439,900 yuan which was significantly lower than the previously announced price of 510,000 yuan.
There were no comments available on the price cuts by the company.
The cut down of prices was preceded by a 30 per cent reduction in the prices of the China-made Model Y by Tesla earlier this year to 339,900 yuan from its previous price of 488,000 yuan, said a number of media reports in China
The price range of comparable cars from the Chinese electric car start-up Nio such as its ES6 is between 358,000 yuan and 468,000 yuan.
A joint venture with Brilliance Auto is used by BMW to manufacture the iX3 in China. According to the German automaker, this made in China car will be its first model made by the joint venture that BMW will also export to other countries.
The Chinese market is being preferred by most of the global car companies for releasing and launching of their latest electric cars. This is because China is the largest market for electric vehicles as well as the largest auto market and the Chinese government has supported the electric vehicle market through granting of subsidies as well as the rollout of battery charging infrastructure.
According to the China Association of Automobile Manufacturers, there is expected to be a growth of 40 per cent in the Chinese market in the sale of new energy vehicles, which include both plug-in hybrid and pure electric cars. The association said that despite an overall drop in car sales and the coronavirus pandemic, there was a 10.9 per cent surge in the sale of new energy vehicle sales last year to 1.367 million vehicles.