Brilliance, BMW to form auto finance joint venture

Shanghai, June 10 (Gasgoo.com) An auto finance joint venture invested by BMW and its Chinese partner Brilliance Auto will be formed later this year, Brilliance Auto chairman said recently. Brilliance has decided to hold 21% stake for the joint financing unit.

According to Brilliance Auto chairman Qi Yumin, the application has been submitted to authorities for approval and the joint venture will share the profits according to their ownership stakes. The auto finance arm will service the Brilliance BMW joint venture. Meanwhile, Brilliance Auto is also mulling over an auto financing unit in conjunction with GE Finance Company to provide financing services to its independent brands.

In addition, the second BMW Brilliance Automotive Ltd plant, a joint venture between BMW and Brilliance Auto, will begin construction in the second half this year. The plant, with an annual production capacity of 70,000 vehicles, will be operational by 2010, producing brand-new BMW vehicles. By then, the two sides will share painting and stamping facilities. The second plant will be located in Shenyang and a 20-min car ride away from BMW Brilliance's first plant.

After several rounds of talks, Brilliance and BMW have agreed on their stake ratio in the joint financing unit, whose investment is based on half of the current 58% to 42% car-making joint venture between BMW and Brilliance. That means Brilliance Auto will hold 21% stake for the finance unit, which is awaiting the green light from China's finance regulators.