BMW to expand China venture with Brilliance Auto

Shanghai, November 12 (Gasgoo.com) BMW AG, the world's largest maker of luxury cars, signed an agreement today with its Chinese partner Brilliance Auto to invest $735 million to expand the capacity of their joint venture in China, Reuters reported. 

The new investment includes expanding an existing plant in the northeastern Chinese city of Shenyang, where Brilliance and BMW now manufacture BMW 3-series and 5-series sedans. Annual output at the current plant will increase to 75,000 units by the end of next year, from current 30,000 units.

Construction on a second plant is scheduled to start in 2010 with a planned annual production capacity of 100,000 units, according to Qi Yumin, the chairman of Brilliance Group.

"Today, China is a global driver of growth in the automotive market," said Friedrich Eichiner, a board member of the BMW Group. "China will play a major role in the global automotive business, in the development of future technologies."

BMW sold 9,558 cars of its BMW and Mini brands in China in October, up 81% from a year earlier, bringing sales in the first ten months up 36.7% to 71,952 units. China has overtaken Italy as the fourth-biggest market for BMW after Germany, the U.S. and the UK.

China, now becoming the world's largest auto market, has been a bright spot for the global auto industry this year, thanks to a raft of government incentives, including cuts in sales taxes on small cars and subsidies for fuel-efficient vehicles.