Information on BMW Foreign Direct Investment

Save

The German automaker Bavarian Motor Works -- known as BMW -- was, until 1992, reluctant to invest outside of Germany. Since then, BMW's markets and production facilities have grown global in scope. As of May 2011, BMW is growing rapidly in China, India, the United States and Russia.

Strategy

  • BMW has always been important in the luxury car market. This market, however, is highly competitive. All major luxury automakers such as Rolls-Royce and Mercedes are heavily invested overseas. The present BMW strategy is to break open the Asian market through both China and India -- two economies that have been growing rapidly and have developed a strong demand for European luxury cars. While the economy has slowed in the United States, BMW's South Carolina plant is expanding. The German firm announced this expansion in 2008, saying that the American market for this car line is increasing despite the deep recession.

India

  • BMW-India is owned totally by the German firm. Its main plant is located in Chennai, and, since 2010, has been expanding rapidly. This plant has recently bought more land and equipment and seeks to use its growing India market to expand its entire Asian production line. BMW has also announced that it seeks to double the number of dealerships in India over the next few years and wants to markedly increase its 2010 figure of 10,000 units sold.

China

  • The Chinese market is similar to India's: These are two strong, growing economies whose newly rich entrepreneurs want the status of European millionaires. Luxury cars are an important part of this status. As of early 2011, BMW has invested $1.44 billion in China. It has two large plants, one in Da Dong and the other in Tiexi, both in the well-developed eastern part of the country. BMW has dozens of dealerships throughout the nation. In the first four months of 2011, BMW sold more than 74,000 cars of all types in the country. The Chinese demand is predicted to slow but will remain high for the short term.

Russia

  • BMW built a plant in Kallinigrad, in the westernmost part of the country, in 1999. In 2009, BMW sold more than 16,000 cars and sees Russia, too, as part of its overall Asian strategy. In all cases, BMW appeals to the newly rich in these “transition” economies, providing affluent people with status symbols to match their newfound wealth.

Related Searches

References

  • Photo Credit Johannes Simon/Getty Images News/Getty Images
Promoted By Zergnet

Comments

You May Also Like

  • About International Trade & Foreign Direct Investment

    International trade and foreign direct investment (FDI) are tightly intertwined ideas. The simplest concept is that countries trade to receive what they...

  • BMW Vs. Toyota

    If there is anything that binds Toyota Motor Company and BMW, it is the fact that over the last two decades they...

  • Domestic Vs. Foreign Cars

    Differences between domestic manufactured and imported cars have long been documented with some evidence suggesting that foreign built cars are better built...

  • How to Find Cheap BMW Used Car Parts

    BMWs are very well engineered cars that have earned a reputation as being fun, safe and luxurious. But most people also know...

  • What Is Backward Foreign Direct Investment?

    Foreign direct investment (FDI), especially in the post-World War II world, has become one of the most significant elements of the world...

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!