Following the BMW Group assuming 50% ownership of BMW Brilliance Automotive in China during late 2018, this month, BMW has increased its stake yet again, this time to 75%. This makes BMW the first and only automaker to establish majority ownership in China, after the granting of a new business license by Chinese regulators. As part of the agreement, the joint venture between BMW and Brilliance has been extended to 2040, and the remaining 25% stake is indirectly owned by Brilliance China Automotive Holdings Ltd.
“Today marks an important step, as we continue to expand our long and successful commitment to China. We firmly believe that our continued success in the world’s largest automotive market can only go hand in hand with the growth and further development of our BBA joint venture. The joint venture contract has been extended until 2040 and lays the foundation for sustainable business success, creating growth and prosperity in the province of Liaoning and beyond,” explained Oliver Zipse, chairman of the Board of Management of BMW AG.
Founded in 2003, BMW Brilliance Automotive produced over 700,000 vehicles during 2021, and employs roughly 23,000 people. The automaker currently operates a plant in Shenyang, while another is being built in Tiexi. The Shenyang plant is currently being expanded to meet increasing demand in the national market, and the agreement with BMW which proceeded this week was first announced back in 2018, the year of the automaker’s fifteenth anniversary.
“BBA’s remarkable success story testifies to the proven partnership within the joint venture and with the provincial government in Liaoning,” said Nicolas Peter, member of the Board of Management of BMW AG responsible for finance. “Our local investments are proving to be the right approach. BBA has significantly contributed to position the BMW brand as a leading premium brand in China. In the past decade alone, BBA has invested more than 10 billion euros in China. Our extended joint venture contract lays the foundation for further mutual growth and progressive development in the future. It therefore paves the way for balanced development in the three main regions of the world, as we have done in the past.”
The purchase of the additional 25% stake is expected to be completed later this month, and its impact on BMW’s financials is discussed in detail in a corporate press release, which says more figures will become available when the automaker’s first quarter statement is released in early May.
BMW vehicles built by Brilliance are almost exclusively destined for the Chinese market (the world’s largest automotive market), while BMWs produced at other global plants are also imported to meet demand. During 2018, BMW produced between 10,000 and 20,000 X5 SAVs (which are primarily constructed at BMW Group Plant Spartanburg in South Carolina) destined for the Chinese market in nearby Thailand to avoid import taxes. Now, Chinese production of the X5 is being expanded to satisfy demand, and Brilliance is set to start building them during the second quarter of this year.—Alex Tock
[Photos courtesy BMW AG.]