DETROIT (AP) BMW is looking to get rid of leases and lease deals in its own brands to cut costs, a move that could reduce the amount of money it has to spend on vehicles and reduce the number of cars sold.
The Detroit-based automaker has said it is looking at leasing or buying back a large number of its vehicles, a trend that could cost it billions of dollars if it goes ahead.
That would help offset the costs of building new vehicles and increase revenue.
The announcement on Wednesday by BMW chief executive Norbert Reithofer that the company is looking into leasing will be a boost for the company’s cash-strapped unit.
BMW is trying to sell off a big chunk of its luxury brands as it struggles to revive sales after two decades of falling sales.
The plan, which is being tested in China, is aimed at reducing the costs and risks of leasing and buying back cars and reducing the amount that the automaker spends on leasing.
Reithoffers that BMW would look to buy back about one-third of its models, with the rest being leased or leased to other companies.
That will reduce the costs per vehicle, the company said.
The moves come as the company looks to expand its luxury brand and is trying its best to make a dent in the U.S. luxury market.
The BMW brand has seen declines in sales in the United States, Europe and China, but has been growing steadily in India and Europe.
BMW’s total luxury car sales in India last year were about $1.7 billion, or about 15 percent of the global market, according to research firm IHS Markit.
Reethofer has said that the new plan will save the automanufacturer about $10 billion in the first year, but he added that the plan is not set in stone.BMW has about 2.5 million cars in U.T. sales in Germany and China.