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BMW takes control of China joint venture

October 11, 2018

German carmaker BMW has announced it's planning to acquire a majority stake in its joint venture in China. It's the first foreign auto manufacturer to do so after Beijing loosened its corporate ownership rules.

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Chinese workers checking BMW-Brilliance cars
Image: picture-alliance/dpa

German premium carmaker BMW said on Thursday it planned to acquire a further 25 percent stake in its venture with Brilliance China Automotive for €3.6 billion ($4.2 billion), bringing its total stake to 75 percent.

Foreign carmakers have long been restricted to holding no more than a 50 percent stake in their China operations, but Beijing decided to relax ownership caps this year.

The changes in ownership rules are a boon for foreign automakers who will gain a greater share of control and profits from their China business, hurting prospects for their Chinese partners.

Brilliance China's shares in Hong Kong have taken a dive this year and were suspended from trading on Thursday.

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"Our joint venture is the cornerstone of the BMW brand's sustained success in its largest single market," BMW Chairman Harald Krüger said in a statement.

The Munich-based company said it would be focusing even more on the development and production of electric vehicles in China.

The carmaker indicated it would invest €3 billion in a new plant near its Tiexi facility in China to double its capacity on the ground.

Together with Brilliance, BMW aims to produce a total of 650,000 units annually by 2020.

German carmakers look to growing Chinese market

hg/sri (AFP, dpa)