The year 2016 marked the beginning of next phase development and a multiple new product launch cycle for our BMW Brilliance joint venture (“BBA” or the “JV”). The capacity expansion project at the Tiexi plant was completed at the beginning of the year with the addition of an all-new front-wheel-drive production platform. Together with the Dadong plant, the JV has reached total annual production capacity of over 400,000 units providing for products of different architectures. In addition, the new engine plant in Tiexi had also commenced operation at the beginning of the year, enabling the JV to produce the brand new 3 and 4-cylinder BMW engines locally. These new facilities have provided support to the JV’s new product launches starting with the brand new 2-series Active Tourer and the next generation X1 long-wheelbase which were introduced to the market in March and May of 2016, respectively.

The addition of the 2-series Active Tourer as the fourth locally produced BMW product, and the first to be produced using the new front-wheel-drive platform, had contributed newly added volume in 2016. Sales of the new and improved next generation X1 equipped for the first time with a long-wheelbase to cater to Chinese customer demands have also ramped up quickly since its May 2016 market launch. Alongside these new launches, our 3-series and 5-series continued to deliver steady sales amid a very challenging market. As a result, BBA achieved sales of 310,026 BMW vehicles in 2016, representing an increase of 8.0% when compared to the previous year.

BBA has continued to expand its dealership network which had reached 463 full service 4S shops nationwide as at 31st December, 2016. The JV continues to work closely with its sales organization on all fronts in an effort to sustain the profitability of both the JV and its dealers. Our JV’s sales activities will continue to be supported by the BMW auto finance company, resulting in increased sales volume and profits to the JV.

We continue to be confident about the long-term growth prospects of the Chinese premium auto industry. We believe the new products to be introduced by BBA over the next few years will have strong customer appeal, and will broaden and also better tailor our product portfolio to Chinese consumers’ preferences. Cost reduction, operational efficiency, sales volume enhancement, component localization, new energy product development, and further integration of our JV into the BMW network via exports of vehicles and components from China will all remain key focus areas for the JV.

As for the minibus business, the traditional Haise and Granse products had achieved stable sales volume in 2016. Sales of the Huasong MPV model, however, has been disappointing, as further efforts are still required in promoting brand recognition and re-evaluating market opportunities. The Group is also considering various routes of potential strategic moves, including, but not limited to, an attempt to explore the possibility of cooperation with a new business partner, to turnaround its minibus operation over time. However, it is likely that the minibus and MPV operation will continue to have a negative impact on the Group’s overall financial performance in 2017.

Brilliance-BEA Auto Finance Co., Ltd (“BBAFC”), the Company’s auto finance subsidiary in China, had once again achieved profitability in 2016. In addition to supporting the Group’s sales of its minibus and MPVs and our major shareholder Huachen’s sedan products for both wholesale and retail, in December 2016 BBAFC has also successfully initiated a strategic partnership with Jaguar Land Rover to finance their customers and dealers in China. BBAFC will continue to seek expansion to provide finance and insurance support to multi-brand businesses over time.

The year 2017 continues to be a very challenging year for the Group. Maintaining the prominent position of BMW Brilliance in the premium auto market remains the Group’s business priority. Apart from that, the Group will continue to identify new business opportunities as well as ways to further streamline its existing operation and corporate structure as its business continues to grow.

於二零一六年期間，中國經濟繼續呈現溫和增長，國內生產總值上升6.7%，為26年來最慢。儘管經濟增長緩慢，惟根據中國汽車工業協會資料，在小排量汽車之政府購買稅激勵推動下，中國汽車總銷量在年內躍升13.7%，為三年來增長最快，並達到28,000,000輛。乘用車銷量亦於二零一六年創下新紀錄，期內達到24,400,000輛，或上升14.9%。雖然豪華車輛銷售因屬一般較大發動機產品而未能從購買稅減讓受益，但豪華乘用車分部仍然與整體乘用車市場同樣穩步增長，主要是由於年內推出新產品。

二零一六年代表我們下一個開發階段之始，亦為我們華晨寶馬合資企業（「華晨寶馬」或「合資企業」）多項新產品發佈週期。鐵西廠房之擴容工程於年初完成，並增設一個全新前輪驅動式生產平台。連同大東廠房，合資企業總年產能超過400,000輛，提供不同結構及設計之產品。此外，鐵西新發動機廠房亦已於年初開始投入運作，使合資企業能於國內生產新款3缸及4缸寶馬發動機。此等新設備為合資企業開始推出多項新產品提供支持，當中新2系旅行車及下一代長軸距X1已分別於二零一六年三月及五月先後面世。

2系旅行車新增作為第四款本地生產之寶馬產品，及第一款使用新前輪驅動式平台生產之產品，已經為二零一六年銷量增幅作出貢獻。全新經改良之下一代X1第一次配備長軸距，可滿足中國客戶需求，於二零一六年五月推售不久即取得理想銷情。除這些新發佈項目外，3系及5系繼續在挑戰重重之市場表現穩定銷售。因此，華晨寶馬在二零一六年錄得310,026輛寶馬汽車銷售，較去年上升8.0%。

華晨寶馬持續擴展其經銷網絡，於二零一六年十二月三十一日已在全國擁有多達463間全方位服務4S店舖。合資企業在各範疇與其銷售組織保持緊密合作，以維持合資企業及其經銷商之盈利能力。合資企業銷售活動將繼續獲得寶馬汽車金融公司之支持，使合資企業銷量及利潤皆升。

我們對中國豪華汽車行業長遠發展前景依然抱有信心。我們相信，華晨寶馬於未來數年推出之新產品將廣獲客戶垂青，其將擴大我們之產品組合，使之更能迎合中國消費者喜好。降低成本、營運效率、提升銷量、零部件國產化、新能源產品開發以及合資企業透過中國汽車及零部件出口進一步融入寶馬網絡等所有議題，仍將是合資企業之重點關注領域。

輕型客車業務方面，傳統海獅及閣瑞斯產品在二零一六年實現穩定銷量。然而，華頌多用途汽車型號之銷售令人失望，其仍然需要加大力度促進品牌認受性及重新評估市場機會。本集團亦正考慮多個路線之潛在策略舉措，包括（但不限於）試圖探索與新業務合作夥伴合作之可能性，假以時日將輕型客車業務轉虧為盈。然而，輕型客車及多用途汽車業務可能繼續對本集團二零一七年整體財務表現造成負面影響。

華晨東亞汽車金融有限公司（「華晨東亞汽車金融」，本公司在中國之汽車金融附屬公司）在二零一六年再次錄得盈利。除支持本集團輕型客車及多用途汽車以及我們主要股東華晨批發及零售之轎車產品之銷售外，於二零一六年十二月，華晨東亞汽車金融亦成功地與捷豹路虎開展戰略合作，為其中國客戶及經銷商提供融資。華晨東亞汽車金融將繼續尋求擴充，假以時日為多品牌業務提供金融及保險支持。

二零一七年對本集團而言仍挑戰重重。維持華晨寶馬於豪華汽車市場之領先地位仍為本集團首要任務。除此以外，隨著本集團業務日益壯大，本集團亦將繼續物色新商機，並尋求方法進一步精簡現有營運及公司架構。