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BMW appeases China dealers

January 5, 2015

Defusing a protracted bilateral row, German auto maker BMW has pledged to pay hundreds of millions of euros to Chinese car dealers. The latter had frequently complained about "unrealistic" sales targets.

https://p.dw.com/p/1EF1P
Chinese worker fixes BMW logo on car
Image: BMW AG

In a bid to settle a quarrel with Chinese car dealers, Munich-based BMW confirmed Monday it had agreed to pay them 5.1 billion yuan (almost 700 million euros, $836 million) to compensate for their recent losses.

The China Automobile Dealers Association (CADA) reported the money would be made available by the end of February.

Numerous car dealers in China had complained to authorities on the ground that sales targets imposed by the German auto maker were far too high, leaving them with many vehicles that just couldn't be shifted.

No real burden sharing

CADA added that meeting BMW's sales targets used to be a prerequisite for dealers getting end-of-year bonuses.

But the recent cooling of the Chinese economy and tighter environmental legislation had seen dealers struggling to sell enough cars, while big carmakers such as BMW kept pocketing profits as scheduled.

Bejing Ratchets up the Pressure on Foreign Car Manufacturers

Germany's DPA news agency said BMW did not comment on further details of its compensation deal. Other auto makers have also been reported to be in talks with Chinese dealers over the same issue.

hg/pad (Reuters, dpa)