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Saturday, 20 June 2009
Brilliance dives after BMW purchases ruled out
Shares of Brilliance China Automotive Holdings, which has a joint venture with Bayerische Motoren Werke, fell 8.93 per cent yesterday after the government told state media it had no plans to buy BMW cars for official use.
Shares of Brilliance China Automotive Holdings, which has a joint venture with Bayerische Motoren Werke, fell 8.93 per cent yesterday after the government told state media it had no plans to buy BMW cars for official use.
Shenyang-based Brilliance had surged 15.38 per cent to 90 HK cents last Friday following an announcement that the central government had included BMW cars in its procurement list.
The stock fell 10 HK cents to close at HK$1.02 yesterday.
The approval for BMW to sell vehicles to central government officials was regarded as a development that could help challenge the dominance of its European rivals in the world’s biggest vehicle market.
Volkswagen’s Audi, the joint-venture partner of Jilin-based First Auto Work Group, and Daimler, the partner of Beijing Automotive Industry Corp, have a substantial share in the official car procurement market.
A spokesman at the central government’s procurement centre told the People’s Daily that including BMW in the list did not imply different government departments were going to replace their vehicles with new ones, but meant the carmaker had the qualifications to supply products to the government.
“All government departments will receive a 15 per cent reduction in their budgets to buy vehicles this year,” said the spokesman. “Most of the official vehicles will not be replaced, except for those with high emissions.”
Official figures show that Beijing spent 80 billion yuan (HK$90.7 billion) buying cars last year, a drop of 22.48 per cent from 2007.
BMW started talks with Beijing back in 2007, seeking to put its cars on the government’s shopping list. Foreign and domestic carmakers see fast-growing official vehicle sales as an entry point to further expansion in the market.
Besides top global luxury brands, other domestic brands on the list include Geely Automobile Holdings, BYD and Chery Automobile.
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Brilliance dives after BMW purchases ruled out
Kandy Wong
20 June 2009
Shares of Brilliance China Automotive Holdings, which has a joint venture with Bayerische Motoren Werke, fell 8.93 per cent yesterday after the government told state media it had no plans to buy BMW cars for official use.
Shenyang-based Brilliance had surged 15.38 per cent to 90 HK cents last Friday following an announcement that the central government had included BMW cars in its procurement list.
The stock fell 10 HK cents to close at HK$1.02 yesterday.
The approval for BMW to sell vehicles to central government officials was regarded as a development that could help challenge the dominance of its European rivals in the world’s biggest vehicle market.
Volkswagen’s Audi, the joint-venture partner of Jilin-based First Auto Work Group, and Daimler, the partner of Beijing Automotive Industry Corp, have a substantial share in the official car procurement market.
A spokesman at the central government’s procurement centre told the People’s Daily that including BMW in the list did not imply different government departments were going to replace their vehicles with new ones, but meant the carmaker had the qualifications to supply products to the government.
“All government departments will receive a 15 per cent reduction in their budgets to buy vehicles this year,” said the spokesman. “Most of the official vehicles will not be replaced, except for those with high emissions.”
Official figures show that Beijing spent 80 billion yuan (HK$90.7 billion) buying cars last year, a drop of 22.48 per cent from 2007.
BMW started talks with Beijing back in 2007, seeking to put its cars on the government’s shopping list. Foreign and domestic carmakers see fast-growing official vehicle sales as an entry point to further expansion in the market.
Besides top global luxury brands, other domestic brands on the list include Geely Automobile Holdings, BYD and Chery Automobile.
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