BMW becomes first global brand to take control of Chinese venture
German car giant spends US$4.1 billion to increase its stake in Brilliance China Automotive by a quarter to 75pc
BMW is spending €3.6 billion (US$4.1 billion) to control its Chinese joint venture, a deal that will give it more power over the German car giant’s business in the world’s biggest car market.
The agreement with Brilliance China Automotive Holding makes BMW the first carmaker to take advantage of China’s policy to let foreign companies take majority control of their local partnerships. The car maker said on Thursday it is increasing its stake in the venture with Brilliance to 75 per cent from the current 50 per cent.
We are now embarking on a new era. China is quickly becoming an important development and production base for BMW new energy vehicles
The move gives BMW a bigger say over its business in China, and allows it to retain a larger proportion of the earnings it generates in the massive market.
China is a key focus for all major car companies, but sales of luxury vehicles have been coming off as the trade war with the US damps consumer demand.
The deal will help BMW lessen the impact of higher tariffs imposed in the trade fight, as it now plans to boost manufacturing capacity in China and expand local production of models including electric cars.
“We are now embarking on a new era,” said BMW chief executive officer Harald Krueger. “China is quickly becoming an important development and production base for BMW new energy vehicles.”
