BMW will pay 3.7 billion euros (about $4.2 billion) to take majority control of its Chinese joint venture after obtaining the necessary license from Beijing, as global automakers seek tighter surveillance of business in the car market. largest car in the world.
As reported by Reuters, the German automaker said on Friday it was increasing its stake in the venture with Brilliance Auto Group from 50% to 75%, as announced in 2018 when China said it would begin relaxing ownership rules in the industry. automotive.
China said, at the time, that it would remove foreign ownership limits for companies that make fully electric and plug-in hybrid vehicles in 2018, for commercial vehicle makers in 2020 and for the car market as a whole by 2022.
BMW also specified that the agreement would have an exceptional positive effect of 7,000 to 8,000 million euros in the financial results of its automotive business and would increase free cash flow by around 5,000 million euros.
“Our expanded joint venture agreement lays the foundation for further mutual growth and progressive development … paves the way for balanced development in the three major world regions,” said Chief Financial Officer Nicolas Peter.
BMW goes all out in China
BMW was the first automaker to declare in October 2018 that it would take control of its main joint venture in China.which was founded in 2003 and is currently running until 2040.
Volkswagen took majority control of its JAC Volkswagen electric vehicle production joint venture in 2020. Mercedes-Benz owns 49% of its China joint venture, Beijing Benz Automotive.
As early as 2019, it was seeking to increase its stake, but faced opposition from its Chinese partner BAIC. BMW expects sales in China to grow through 2022, its chief financial officer said, after seeing 9% growth in BMW and Mini deliveries last year to 846,237 vehicles.
The BMW Brilliance Automotive joint venture will produce 700,000 vehicles in 2021. Headquartered in Shenyang, a plant in Dadong district is currently being expanded, while a new one is also under construction that will make all-electric models alongside hybrids and gasoline-powered cars. internal combustion next to an existing plant in Tiexi.
Source: Larepublica
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