The BMW Mini booth at Shanghai’s auto show—the first since China’s reopening in December—had a nice freebie for attendees: a small tub of ice cream from a local brand.
But the free snack ended up causing a headache for the German carmaker after a video from the show was posted on Bilibili, a YouTube-like platform in China. The recording shows the staff running the booth telling one local visitor that all the ice cream had been given away. When a foreign attendee arrived, staff suddenly had ice cream on hand.
The incident, which state-run media outlet Global Timesreported happening on Wednesday evening, went viral on Chinese social media, with one hashtag “BMW Mini booth accused of discrimination” attracting almost 200 million views on China’s Twitter-like Weibo platform, according to the Financial Times.
BMW Mini apologized on Thursday, saying that “sloppy internal management” and “our staff’s failure of duty” caused “unpleasantness,” in a post to the company’s Weibo account, according to the Financial Times. The company later said that Mini “condemns racism and intolerance in any form.”
A company spokesperson told Fortune that the booth had halted the ice cream giveaway owing to low stock, and the foreign attendee who received one of the last remaining tubs was an acquaintance of one of the hostesses. The company again apologized.
The German carmaker’s shares fell 3.6% on Thursday. By 11:30 a.m. Berlin time on Friday, shares were largely flat.
While other automakers like Tesla have had to deal with public outcry, BMW may have been particularly susceptible to a backlash. Chinese consumers associate the brand with materialistic and stuck-up drivers, noted What’s on Weibo,a publication that tracks and analyzes social media trends in China. Hit-and-runs involving BMW’s cars have also gone viral on Chinese social media, according to the outlet.
Local vs. foreign
China is increasingly a tougher market for foreign automakers, thanks to the increasing sophistication of Chinese brands and underinvestment in electric vehicles. Market share held by foreign legacy automakers fell to 41% in the last quarter of 2022, down from 61% in 2020.
The dominance of local brands is even more stark in the electric vehicle market, where they made up 80% of electric cars sold last year. Legacy automakers, particularly Japanese ones, have been slow to release new EV models, leading Chinese brands as well as Tesla to capture market share.
BYD’s affordable electric cars dominate the market among cost-conscious Chinese consumers, helping the company beat Tesla as the world’s largest maker of electric cars (though BYD’s sales include both hybrids and purely electric vehicles).
Chinese automakers are now confident that the country will overtake Japan as the world’s largest car exporter this year, thanks to electric cars.
Yet the Chinese car market is currently in a slump, with car sales falling 13.4% in the first quarter, according to the China Passenger Car Association. While sales of NEVs (neighborhood electric vehicles) increased, Tesla and Chinese carmakers are currently locked in a price war. (Tesla is engaged in a similar price war in the U.S., with CEO Elon Musk suggesting that he will continue to sacrifice margins in exchange for sales.)
In Shanghai, foreign carmakers took the opportunity to advertise their new electric vehicle models, catching up to the rest of the market. That includes BMW Mini, which is debuting the Mini Cooper SE Convertible. The carmaker claims this model is the world’s first “locally emission-free premium convertible in the small car segment.”
