Sales of the 5 Series broke through the 100,000-unit threshold for the first time in 2012, the first time ever for a single BMW model to realize such a tremendous sales record. This year its average single month sales have surpassed 10,000 units, while monthly 3 Series deliveries exceeded 5,500 units.

"Chinese customers have very high demands for luxury vehicles. They want excellent and lasting quality," said Kastner.

"Everything we are doing here is to deepen our understanding of local markets and better cater to the demands of our clients," he said.

That's why customization services started this year for 5 Series customers.

"In the past, customers who come to dealers could only choose existing models. Now they can add some specialized and exclusive equipments according to their own taste," Kastner said.

He told reporters that service will also soon be available to 3 Series and X1 buyers.

He remarked that the Germans working for BMW have learned a great deal in the local market, especially the Chinese way of thinking.Last April, the automaker established its DesignworksUSA Shanghai studio, which has the major responsibility to "sense the development in the country and its inclinations in design and aesthetics", said Kastner.

Looking ahead

"We always think ahead of others and of the market," the CEO said, which are the keys to BMW Brilliance's success in China.

The luxury brand has now turned its eyes to smaller cities that have strong unmet demand.

Kastner told reporters that China has 100 to 150 cities with a population of over 1 million without any luxury brand dealership.

Yet more than 50 percent of the dealerships for BMW are in small and mid-sized cities.

The joint venture is also expanding after-sale services, an ever-more important profit stream for luxury automakers in China.

The world's first BMW brand experience center opened in Shanghai this April. The carmaker also initiated a "future retail" program to nurture potential customers by enhancing the sales experience "at all touch points" along the retail chain, a BMW executive told reporters earlier.

But looking ahead does not mean blindly expanding, said Kastner.

"We want to give a clear message to Chinese customers that we invest and build factories in the country to first cater to demands here. Before such demands are fully fulfilled, we will not consider too much about other things," he said.

"We believe that prospects for the Chinese market are very bright. Although growth in the luxury segment will not reach 30 to 50 percent like in the past, local customer demands for better vehicles and lifestyle will fuel sales."

"Besides providing customers an enriched portfolio, we also offer them various financing services."

"We are very optimistic about the mid- and long-term development here," Kastner said.