BMW can in China the majority of the previous joint venture with the local carmaker Brilliance take. The State Council in Peking quoted Prime Minister Li Keqiang on its website with the statement: “That the company BMW takes over in a joint venture in China more than 50 percent of the shares, is also a premiere.”
BMW and Brilliance would therefore have agreements in the German-Chinese intergovernmental consultations on Monday in Berlin met. The group is the first example of a joint venture investment of more than 50 percent.
According to information from the “Manager Magazine” and Chinese media BMW should increase its share from today’s 50 percent to at least 75 percent. Both sides agree in principle. The purchase price and details would still have to be negotiated, reported the “Manager Magazin” from the environment of the group.
BMW welcomed dropping the 50 percent limit
A BMW spokesman said on the acquisition: “We can not comment in detail on current discussions with our partner Brilliance.” However, BMW welcomes China’s commitment to further opening up and the abolition of the previous 50 percent limit for foreign investments.
A few months ago, the Chinese government announced that the Since 1994 applicable joint venture constraint For electric cars this year, for commercial vehicles 2020 and for all cars 2022 would fall. So far, the western automakers could build only in joint venture with Chinese partners with a maximum of 50 percent participation cars in the world’s largest market. China wanted to build its domestic manufacturers.
More profit through higher participation
With a higher stake, carmakers can now earn more profit in the profitable Chinese market. On the other hand, the expertise of local manufacturers and the close links between these state enterprises and the government are an advantage that carmakers do not want to risk by renouncing equal cooperation. Shortly after the opening became known BMW, Volkswagen and Daimler declares that there is no need for a change in the proven partnerships.
BMW has been building cars with Brilliance since 2003 in the northeastern Chinese city of Shenyang. Currently, BMW holds 50 percent, Brilliance 40.5 percent, the remaining 9.5 percent are located in the city of Shenyang. In response to the reports, Brilliance’s stock fell on the Stock Exchange Hong Kong by more than eight percent.
Production capacity in Shenyang is to be increased
The joint venture delivered 384,000 cars to customers last year, generating € 14.6 billion in revenue and € 1.3 billion in revenue. Velvet imports and the small car brand Mini In 2017, BMW sold around 595,000 cars in China – almost a quarter of the company’s global sales.
On Monday, BMW announced that its production capacity in Shenyang is expected to increase from its current 450,000 cars to 520,000 vehicles from next year. This would make Shenyang the largest plant of BMW, before Spartanburg in the USA and Dingolfing in Lower Bavaria.
BMW builds cars for the Chinese market with Brilliance in Shenyang from the 1s to the 5s in the long version. From 2020, the all-electric SUV iX3 will be built there and will be the first BMW to be exported from China.