Shanghai (Gasgoo)- On October 11, Brilliance China Automotive Holdings Ltd. (CBA) announced that after selling half of its stake in Brilliance BMW to BMW Group, BMW and Shenyang Jinbei Auto will own 75% and 25% stake in the joint venture respectively. The total registered capital of BMW Brilliance is 150 million euros, 113 million of which is from BMW while the rest is from its local partner.
The announcement also revealed some future investment. First of all, the BMW X5 and battery electric vehicles are expected to be locally produced from 2022. The total annual production capacity will be up to 1 million units. Then, new investment will be granted for new and existing plant structure in Dadong and Tiexi plants.
Currently, the BMW X5 sold in China are produced in BMW’s Spartanburg plant. Affected by the trade spat, a 40% tariff is levied on the imported BMW X5. Thanks to the local production, the price of the model would be lowered sharply. Taking the price gap between the locally-produced BMW X3 and the imported X3 for reference, the locally-produced BMW X5 will be at least RMB 100,000 cheaper than the imported one.
After the deal is closed, the board of BMW Brilliance will be composed of 8 members, six from BMW and 2 from Shenyang Jinbei, while the chairman will be appointed by BMW. All top managers will be named by BMW except vice general managers responsible for financing and personnel.
Under the deal, neither party is allowed to transfer the interests from the registered capital or take it as pledge without the prior written consent from the other party.
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