BMW's Chief Financial Officer Friedrich Eichiner said the Bavarian auto maker had avoided pushing sales in a falling market and had opted to cut back production instead, as a way to strike a better balance between supply and demand.

China, the world's largest auto market, has seen the pace of sales slow from double-digit growth levels to about 7 percent this year, forcing BMW to compensate dealers who are struggling to shift an ageing fleet of vehicles.

The BMW 3-series and the X1 are nearing the end of their lifecycle, as is the 7-series.

"We have a run out on the 3-series. The 5-series is in the second half of its lifecycle. Of course this has a certain influence on how you market cars," Eichiner told analysts.

Nonetheless, BMW will still seek to grow its dealership network in China, looking to add 30 additional dealers this year.

(Reporting by Edward Taylor; Editing by Maria Sheahan)