BMW is pushing ahead with its electrical plans in China. First, the carmaker takes over the majority of the joint venture with local car manufacturer Brilliance, second, the joint venture announced that it would invest over 3 bn euros in new and existing plant structures in Shenyang.
The German carmaker invests 3.6 bn euros in order to increase its share in the joint venture from 50 to 75 percent and thus, to take the control. That’s not a self-evident fact as the Chinese government relaxed joint venture requirement for foreign car manufacturers just recently. However, BMW says, the deal to take over the majority will not close until 2022, when the new JV rules in China come into force.
In the meantime, the JV plans to expand and modernise its plant structures in Shenyang. Among others, a new facility will arise, doubling the capacity of the JV’s site in Tiexi. It will incorporate a single production line being able to build vehicles with fully electric, partially electric and conventional drivetrains. “With our highly flexible production system, we can respond quickly to market demand and would be able to ramp up production of electric vehicles to 100 percent of our output”, says Oliver Zipse, member of the Board of Management of BMW AG.
The neighbouring plant in Dadong will see gradual expansion for future model variants and the expected market growth. All in all, the annual production capacity at the BBA plants will increase from almost 400,000 vehicles in 2017 to 650,000 units from the early 2020s, according to BMW.
Currently, six electrified models of the BMW Group are available in China. In Tiexi, the BMW X1’s plug-in hybrid is rolling off the lines, in Dadong, this is the case for the BMW 5 Series PHEV. From 2020, the fully-electric BMW iX3 will also be manufactured in Dadong – its sole production location – and be exported to markets worldwide.
In addition to its two existing vehicle plants, BBA opened its own battery factory in Tiexi a year ago. Since May, an expansion of this battery factory is already on the way. In the near future, it shall provide next-gen batteries for the BMW iX3.
The joint venture of BMW and Brilliance exists already 15 years. In the context of this anniversary, both partners agreed on the early extension of the joint venture contract and the further deepening of the collaboration. According to BMW, the extended contract is valid for 22 more years: from 2018 to 2040.
bloombergquint.com, bbc.com, press.bmwgroup.com