BMW Targets Third-Tier Cities in China

BMW AG is expanding its marketing efforts in China to relatively small cities with populations of a few million people each, the Financial Times reports.

The luxury car maker has begun holding hour-long "Open Course" promotional events at dealerships to attract BMW owners and potential first-time buyers. The educationally oriented presentations feature interactive discussion, displays and an automotive expert who discusses such topics as design and performance.

BMW tells the FT it has dealerships in most of China's tier-three cities (populations of several million) and is beginning to expand into fourth-tier urban regions (populations of one million or more).

The newspaper says tier one and two cities generally are defined as urban centers with average annual per capital incomes of about $12700 and $7,100, respectively. Marketers say car sales in a region begin to rise when average incomes approach $10,000.

Bernstein Research notes that last year 10 of China's fastest-growing markets were in China's relatively poor provinces. BMW sales in China through the first two months of 2014 were up 11%, according to the China Assn. of Automobile Manufacturers.