BMW Production Shift to China Pays Off with Jump in X3 Sales

BMW AG reported a 33% sales jump in China during May after a shift to local production of its X3 sport utility vehicle boosted deliveries, defying a year-long pullback in the world’s largest automotive market. Making the X3 locally helps avoid a 15% Chinese import tariff on cars that were previously shipped in from BMW’s Spartanburg plant in North Carolina. The move also reduces the risk to the German automaker should trade tensions lead to additional levies. Last year, China temporarily hiked tariffs on U.S.-made cars to 40%. BMW said those measures cost it 300 million euros US$338 million in profit last year. Higher sales in China lifted overall deliveries at BMW by 4.6%, outpacing premium rivals Mercedes-Benz and Audi, which have struggled with model changeovers and a steep decline in the Chinese market after almost three decades of growth. Sales at Audi, owned by Volkswagen AG, fell 7.4% in China and 5.4% overall. For Daimler AG-owned Mercedes, sales fell 0.9% in the country and 1.3% overall in May.