BMW has announced that it will be increasing its stake in its joint-venture in China with Brilliance Automotive in a deal that will see it taking over control of BMW Brilliance Automotive (BBA). The deal, which is set to be completed in 2022 when China lifts the rules on foreign ownership limits, will see BMW upping its share in the JV from 50% to 75%.
The extended JV contract is valid for 22 years, from 2018 to 2040. As part of the deal, the German automaker is set to invest more than three billion euros to build and upgrade existing plant operations in Shenyang over the coming years.
Last year, BBA’s factories in Tiexi and Dadong produced almost 400,000 vehicles. In Tiexi, a new plant on the existing plant ground will double the site’s capacity, while extensive remodelling and expansion measures will target the neighbouring plant in Dadong. Total production capacity for the plants are slated to gradually increase to 650,000 units from the early 2020s, creating 5,000 new jobs in the process.
Presently, six BMW models are produced at the Shenyang factories – Tiexi builds the 1 Series Sedan, the 2 Series Active Tourer, the 3 Series sedan and the X1, while Dadong assembles the long-wheelbase 5 Series as well as the X3, and from 2020, the fully-electric iX3. Dadong will be the iX3’s sole production location, with the car being exported to global markets.
The move by BMW to increase its scope in China is no surprise – the country is the brand’s biggest single market globally. Last year, it sold around 560,000 BMW brand vehicles there, more than Germany and the US together, with two-thirds of these being those produced by BBA in Tiexi and Dadong.
In addition to its two existing vehicle plants, BBA also opened its own battery factory in Tiexi a year ago, and expansion is now on the cards – an upcoming line will eventually produce new, more powerful batteries with fifth-generation electric technology for the iX3.
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