New precedence: BMW to hold 75% of Chinese JV
BMW is planning to increase the ownership percentage of their joint venture BMW Brilliance Automotive (BBA) in China to at least 75%, which would make them the first foreign vehicle manufacturer in China to receive permission to own more than 50% of a JV.
The information was released by the Chinese government,, who made the announcement via one of their news sites. Premier minister Li Kequiang said that the BMW ownership of the majority of the joint venture were the first case in the automobile industry. He even acknowledged that it were a possibility that BMW would acquire more than 75% of the venture. The BBW JV celebrated its 15 year anniversary this year, and currently BMW owns 50% of the venture, while Brilliance owns 40.5%, and the other 9.5% are owned by the city of Shenyang.
The question on everyone’s minds in this case is whether China is opening up their protectionist policies sooner than expected? BMW’s case definitely speaks for this scenario. Foreign vehicle manufacturers will be allowed to set up shop in China without a joint venture starting in 2022. For hybrids and BEVs, the requirement will fall slightly earlier this year, and for utility vehicles in 2020.
As part of the German-Chinese economic forum in Berlin, BMW and Brilliance announced their plans to expand their cooperation earlier this week. Specifically, BBA will increase their production capacity in their two factories in Shenyang to a total of 520,000 BMWs annually, starting in 2019. Further, BMW will also begin exporting the BMW iX3 to markets beyond China.
BMW is also forging tighter bonds with their Chinese partner Great Wall: the duo confirmed their planned joint venture at the forum as well, which will be called Spotlight Automotive Limited and will be located in the Jiangsu province. The venture will focus on the development and production of electric vehicles in China. Next to the Electro Mini, the JV will also produce EVs for Great Wall.
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