BMW will become the first foreign automaker to acquire a majority stake in a joint venture in China. BMW will share its stake in the joint venture Brilliance China Automotive from 50 to 75 percent, the company announced on Thursday. The purchase price for the additional 25 percent stake amounts to 3.6 billion euros. The competent authorities still have to agree.
At the same time, both companies extended their cooperation until 2040, as BMW further communicated. The aim is to increase production capacity at the existing locations in Shenyang expand.
So far, foreign Car manufacturer in China hold only a maximum of 50 percent of joint ventures with Chinese partners. The government announced in April, however, to gradually lift this compulsion. Manufacturers of electric cars are exempted from the requirement this year, by 2020, the compulsion for commercial vehicle manufacturers should fall, by 2022 for manufacturers of conventional cars.
BMW announced Thursday that the acquisition of a majority stake in the joint venture with Brilliance should be in 2022, the year in which the joint venture obligation for automotive production in China expires.
China hopes to achieve a greater exchange of capital, technology and personnel between Chinese and foreign companies. Market opening is also considered a signal of liberalization. At the center of activities is the expansion of the electromobility , A special buying incentive is the preferred approval of e-cars in major cities. License plates for gasoline cars will be raffled or expensive to buy. Buyers often have to wait years while electric vehicles are more likely to be approved. There are also driving bans on certain days that do not apply to e-cars.
China is the largest car market in the world. In 2017, 28.9 million vehicles were sold there. For German manufacturers, the market is enormously important: every fifth car that is registered in China carries a German trademark. The market share of foreign brands totaled around 55 percent in the first quarter of 2018.
In 2017, BMW delivered around 560,000 cars in China. Sales increased by 4.2 percent in the first eight months of the year compared to the same period of the previous year. In the future, the carmaker will increasingly focus on the growing demand for e-cars in China. Six models are already offered electrified today. In Dadong from 2020, the all-electric BMWiX3 from the tape. It is built exclusively in China and should also be exported.