German premium car maker BMW hopes China will become one of its five biggest markets in the world in a decade, despite a drop in sales in the first quarter.

"For BMW, China now is within the top 10 markets in the world and it will be within the top five markets within the next decade," said Helmut Panke, chairman of BMW, in an interview at the 11th Shanghai International Auto Show.

BMW's sales on the mainland tumbled by 11 per cent year-on-year to 3,977 vehicles in the first quarter of this year, according to figures from the company's Beijing office.

Among the sales, 3,150 units were produced at BMW's joint venture in Shenyang, capital of Northeast China's Liaoning Province, which started to assemble the 3 and 5 Series sedans in late 2003.

BMW sold 15,500 vehicles on the mainland last year, down 16 per cent from 2003.

However, Panke said: "We will perform better this year than last year in China."

BMW will introduce a newly-developed 3 Series sedan from the joint venture in the second half of this year, and extend its dealership network to boost sales, Panke said.

BMW will increase the number of its authorized dealers in China to 60 at the end of this year from 40 at present, he said.

"We will see step-by-step growth of the premium segment's share in China's car market," he said.

He forecast sales of premium vehicles as a proportion of the car market will double to between 5 and 6 per cent within the next five years.

Panke believes a premium car brand must show "uncompromising engineering, leading in innovation, highest-standard quality and emotional value to the customers."

"Mercedes-Benz is the No 1 competitor. But it is very different from us. If Chinese customers want a luxury and passive car, they can choose Mercedes-Benz. If they want a dynamic and driving-oriented car, they can choose BMW," he said.

Analysts attributed BMW's sales drop in China to two key factors - the deceleration of China's car market as a whole and customers' doubts about the quality of BMW's locally-built vehicles.

(China Daily April 26, 2005)