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BMW expects China to pass US as its top market in 2013

When you combine two billion citizens, 100 cities with more than a million inhabitants and an economy that's as unrestrained as Jim Cramer on an Adderall binge, China's explosive auto industry growth shouldn't be a huge surprise. Audi already lists the communist country as its largest market, while Mercedes-Benz is expecting it to be there in the next few years. Now, according to a report from Automotive News, BMW is expecting the People's Republic to overtake the United States in sales by the end of 2013.
We already discovered the extent that BMW is going to in establishing a dedicated Chinese stronghold, when we explored BMW's Shanghai-based DesignWorks studio ahead of April's Shanghai Motor Show. And while we argued that DesignWorks Shanghai hasn't really borne fruit, it isn't due to a lack of sales.
BMW China has seen a 16-percent jump in year-over-year sales, lead by a 28-percent gain in 5 Series sales. Part of BMW's growth strategy comes from an ever-expanding dealership network. Remember those 100 cities we mentioned with over one million people? According to Karsten Engel, CEO of BMW's Chinese operations, those 100-million-plus city dwellers don't have access to a premium dealership.

Electric living with a BMW i3

Rarely in the 27-plus years I've been testing and writing about cars has any vehicle changed this much from my initial impression until I was later able to spend more time in one. Nearly two years ago, I got a brief test drive of the then-new BMW i3 EV on a selection of both flat and hilly, curvy roads west of Los Angeles the day before LA Auto Show press days. My impressions at the time were mixed: polarizing exterior and interior designs but roomy, easily accessible rear cabin; great twisty road handling but somewhat brittle rough-road ride; good performance but annoyingly strong (always on) regenerative braking. And there was no opportunity to test one with the optional range-extender (which BMW calls a "REx") engine. So I wanted an extended experience in a REx-equipped i3, and recently got one. And, I'm here to report that, driving it for a week like I owned it, the quirky i3 soon won me over. The quirky i3 soon won me over. The $42,400 BMW EV's unique, lightweight "LifeDrive" architecture features a Carbon Fiber Reinforced Plastic (CFRP) passenger cell on an all-aluminum chassis. Powered by a 22-kWh lithium-ion battery pack, its 170-hp AC synchronous motor spins out a healthy 184-pound-feet of torque through a single-speed transmission and offers three drive modes: Comfort, Eco Pro (which BMW says adds roughly 12 percent of range) and Eco Pro+ (another 12 percent). The optional rear-mounted 647 cc (0.65-liter) in-line 2-cylinder REx engine drives an electric generator, never the wheels. It increases the sticker price to $46,250 and curb weight from 2,860 pounds to 3,130 lb., and that 270-lb. weight penalty reduces its electric-only range from 81 to 72 miles and EPA-rated combined (gas-equivalent) fuel economy from 124 to 117 MPGe, and slows its 0-60-mph acceleration from 7.0 to 7.8 sec. But it nearly doubles the i3's official EPA-rated total range from an EV-only 81 miles to an EV-plus-gasoline 150 miles. The i3 arrived (from roughly 90 miles away) with its battery depleted but an indicated 75 miles of gas-powered range remaining. Wanting to experience it REx-only at first, I drove it on a 9.6-mile local trip and found little difference in sound or performance from what I recalled from that California battery-only test drive. When I returned home, however, the indicated gas range was just 55 miles, so I had used 20 miles of projected range in less than 10 local miles. My initial impressions were good, with a few quibbles.

Foreign automakers pay from $38 to $65 per hour to non-union workers

As leaders for the United Auto Workers gather in Detroit for their Special Convention on Collective Bargaining to work out the negotiating stance for this year's new labor agreements with the Detroit 3 automakers, what they most want to do is figure out how to eliminate the two-tier wage scale. However, the lower Tier 2 wage has allowed the domestic automakers to reduce their labor costs, hire more workers, and compete better with their import competition. As it stands, per-hour labor rates including benefits are $58 at General Motors, $57 at Ford, and $48 at Fiat-Chrysler – a reflection of FCA's much greater number of Tier 2 workers. The Center for Automotive Research released a study of labor rates (including benefits) that put numbers to what the imports pay: Mercedes-Benz pays the most, at an average of $65 per hour, Volkswagen pays the least, at $38 per hour, and BMW is just a hair above that at $39 per hour. Among the Detroit competitors, Honda workers earn an average of $49 per hour, at Toyota it's $48 per hour, Nissan is $42 per hour, and Hyundai-Kia pays $41 per hour. The lower import wages are aided by their greater use of temporary workers compared to the domestics. Automotive News says the ten-dollar gap between those foreign camakers and the domestics turns out to about an extra $250 per car in labor, which adds up quickly when you're pumping out many millions of cars. That $250-per-car number is one that, come negotiating time, the Detroit 3 will want to reduce, as the UAW is trying to raise both Tier 1 and Tier 2 wages. Another wrinkle is that the domestic carmakers are considering the wide adoption of a third wage level lower than Tier 2. Some workers who do minor tasks like assembling parts trays kits and battery packs already make less than Tier 2, but the UAW will be quite wary about cementing yet another wage scale at the bottom of the system while it's trying to fight a bigger battle at the top. News Source: Automotive News - sub. req., BloombergImage Credit: AP Photo/Erik Schelzig Earnings/Financials UAW/Unions BMW Chevrolet Fiat Ford GM Honda Hyundai Kia Mercedes-Benz Nissan Toyota Volkswagen labor wages collective bargaining labor costs