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2018 BMW 5 Series built by BMW Brilliance Automotive joint venture

2018 BMW 5 Series built by BMW Brilliance Automotive joint venture

In order to build cars in China and avoid the high import tariffs of the country, foreign automakers had to cooperate with 50/50 joint ventures with local companies.

However, the Chinese government drew up a plan earlier this year level out the rule until 2022This paves the way for foreign carmakers to buy their joint venture partners and take more of their profits home.

The first to react is the BMW Group, which plans to increase its stake in a joint venture with Chinese carmaker Brilliance from its current 50 percent to 75 percent on Thursday. The move will cost BMW approximately $ 4.2 billion and is still subject to shareholder approval.

BMW signed a contract extension with Brilliance on Thursday to extend its partnership until 2040. The joint venture, known as BMW Brilliance Automotive, will invest nearly $ 3.5 billion in plant modernization and capacity expansion. The total annual production capacity of BMW vehicles in the joint venture plants will rise gradually to 650,000 units by the beginning of the 2020s.

The additional capacity will be provided by BMW with greater flexibility Should the trade war between the US and China worsen in the coming years? Last year, BMW built 400,000 vehicles in China and sold 560,000 in China.

The joint venture BMW Brilliance Automotive was founded in 2003. Over the past 15 years, it has become one of the most successful premium vehicle manufacturers in China, covering the production and distribution of BMW cars in China as well as local R & D.

The Volkswagen Group is the only other foreign automaker Granted permission from the Chinese government to increase ownership of its Chinese joint venture for the time being.

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SOURCES: CARSCOOPS BMWBLOG MOTORAUTHORITY
CLASSICCARS MOTOR1 JALOPNIK FOURTITUDE INSIDEEVS
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INDIANAUTOSBLOG CARCOMPLAINTS LUXUO AUTOPARTSWAREHOUSE
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