Oct 11, 2018 (China Knowledge) - BMW AG <BMW:ETR> has agreed to pay USD 4.1 billion, raising its stake to 75% in a Chinese joint venture (JV) with Brilliance China Automotive Holding Ltd. <1114:HK, CBA:FWB>. The additional money from BMW will help increases the production capacity of the JV and enhance the effort of the company to expand localization of car models which include new energy vehicles.
Despite the opening up of Chinese market to car producers and makers, foreign carmakers’ ownership in joint ventures has been capped at 50%. Hence, this move has made BMW the first foreign car company to take control of an enterprise in China, with the support of Chinese Premier Li Keqiang, as the country relaxes its foreign ownership rules for carmakers.
Harald Krueger, BMW chief executive officer, believes that China will become an important manufacturing hub for exports and the largest market for BMW. BMW will also speed up its manufacturing and development process, for the launch of its first pure electric vehicle under this JV by 2020.
Brilliance China is a Chinese automobile manufacturer principally engaged in the design, development, manufacture and sales of its passenger cars sold under the Brilliance brand. The company is also engaged in the manufacturing and sales of BMW vehicles in China.
The company first entered the JV with BMW in 2003. Both companies have worked together and launched Zinoro, an automobile luxury marque specialising in the production of electric vehicles. Zinoro 1E is the first energy vehicles from a Chinese premium manufacturer in early 2014, and it is only available for leasing in Beijing and Shanghai.
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