BMW said to be first to lift equity in China’s JV to 75%

Shanghai (Gasgoo)- German media reported that BMW will lift its equity to 75% in its JV in China, which is a significant milestone in auto industry and will also exert great influence on the Chinese auto market.

It is reported that BMW will expand an additional 25% stake in BMW Brilliance Automotive (BBA), a joint venture that's been going strong for 15 years with China's Brilliance Automotive Group Holdings.

On July 9, BMW Group and Brilliance Automotive Group Holdings signed a long-term framework agreement to further expand their joint venture BMW Brilliance Automotive (BBA). According to the agreement, BBA will increase the capacity of its two local production facilities Tiexi and Dadong in Shenyang, Liaoning Province, to a total of 520,000 BMW branded vehicles in 2019. Furthermore, BMW's first all-electric core model of the BMW brand, the iX3 will be produced by BBA and is planned for export to markets outside of China.

In the presence of China's Prime Minister Li Keqiang and Germany's Chancellor Angela Merkel, BMW (Netherland) Holding Ltd. (BMW) signed a contract on joint venture (JV) operation with China's automaker Great Wall Motor (GWM) on July 10.

As the contract regulates, GWM and BMW will set up a new 50-50 JV, which will be named Spotlight Automotive Ltd., with a registered capital of RMB 1.7 billion. To be sited in Zhang Jiagang, Jiangsu Province, the new JV will enjoy a total investment of RMB 5.1 billion. The JV plans to build up a world-leading vehicle-manufacturing plant which will have an annual production capacity of 160,000 units.

On one hand, lifting BMW's ownership in JVs in China will not only help the automaker to expand local production capacity and increase capital, but also will enable BMW to research, develop, manufacture and market global models outside China and Germany. For example, BMW's core pure electric vehicle, the iX3 will be introduced to the global market.

On the other hand, it is revealed from Great Wall Motor that the locally-produced MINI-branded models will be sold at BBA's sales channels. BMW holding more equity in BBA is relatively fair and logically reasonable for the new JV established by BMW and GWM.