BMW to Hike Stake in China Venture to 75%

October 11, 2018 at 2:04 AM

BMW AG has agreed to spend €3.6 billion ($4.2 billion) to raise its equity in a venture with China partner Brilliance China Automotive Holdings Ltd. to 75% by 2022.

The move comes after China relaxed rules in April that for decades forced foreign carmakers to partner with domestic companies, while limiting their ownership in such ventures to 50%. The restriction ends at the end of this year for electric cars and in 2022 for conventionally powered vehicles.

BMW says it will extend its 15-year-old partnership with Brilliance to 2040 and invest more than €3 billion to expand the venture’s existing operations in Dadong and Shenyang and build a new assembly plant in Tiexi. The projects will hike BMW-brand capacity in China to 650,000 units by the early 2020s from 400,000 vehicles last year.

The venture currently makes BMW’s 1, 2 and 3 Series cars, X1 and X3 small crossovers, and 5 Series long-wheelbase sedans. In 2020, the venture will add production of the BMW iX3 electric crossover model.