BMW Group announced its intend to increase its stake in the BMW-Brilliance joint venture from 50 percent to 75 percent, marking the first time a global automaker gains control of their Chinese venture.
BMW Group will hold the majority of its venture with Brilliance China Automotive in 2022, which is when the rules capping foreign ownership are lifted. The two car makers have decided the early extension of the joint venture contract, which is now valid for 22 years, from 2018 to 2040.
BMW Brilliance Automotive’s factories in Tiexi and Dadong produced almost 400,000 vehicles in 2017. Six BMW models are produced in Tiexi, including the 1-Series Sedan, the 2-Series Active Tourer, the 3-Series Sedan and the X1. At Dadong, BMW produces the 5-Series LWB and the X3, and from 2020 the all-electric iX3 as well.
BMW’s move to gain control of its Chinese joint venture will likely result into shifting more of the company’s production to China. The Chinese government is keen on foreign car makers increasing their investment domestically, as well as open up their market by cutting taxes on imported vehicles and other products.
Industry analysts say that BMW could bring production of models like the X4, X5 and X6 to China from the United States.”Given the trade dispute between the U.S. and China, there is a powerful incentive for automakers to produce vehicles in the market where they sell them,” said independent auto industry analyst James Chao to Automotive News.
