BEIJING, April 25 (Reuters) - BMW is reviewing whether to make its factory in Shenyang, China, an export hub for electric cars, its chief financial officer said at the Beijing Auto Show on Wednesday.
“Export is an option which we are evaluating very intensively,” Nicolas Peter said in an interview with Reuters.
BMW will start manufacturing a fully electric version of its X3 sport-utility vehicle in Shenyang from 2020, further diversifying the carmaker’s production base for offroad vehicles beyond the United States.
BMW has quietly moved production of offroad vehicles beyond its biggest factory in Spartanburg, South Carolina, amid an escalating trade fight between the world’s two biggest economic superpowers.
The United States has accused China of unfair trade practices and theft of intellectual property, and threatened to impose tariffs on up to $150 billion of Chinese imports. China has threatened comparable retaliation.
The decision over whether to export the iX3 model, which BMW will make together with its Chinese joint-venture company Brilliance, will be made in the coming months, Peter said.
A decision to export will depend not only on demand, the cost of logistics and potential tariffs, but also on whether a new business model can be agreed with Brilliance, Peter said.
Under the current arrangement, Brilliance gets half of the profit on cars produced and sold in China, but none of the profit from vehicles earmarked for export, Peter explained.
“I am optimistic that we can make it work,” he said, declining to comment about which export markets could be targeted from China.
Last year, 18 percent of all BMWs sold in China, the world’s largest car market, were imported from Spartanburg.
This year, BMW stopped exporting the X3 from the United States to China, and assigned some production to a plant in Rosslyn, South Africa, and another in China.
“Thirty-five percent of those (vehicles) exported to China were the BMW X3, which is no longer exported from Spartanburg to China,” BMW said earlier this month.
China has threatened to double tariffs to 50 percent on imported automobiles as part of its retaliation against U.S. President Donald Trump’s trade moves. (Reporting by Ilona Wissenbach; Writing by Edward Taylor and Mark Potter)