From：Internet Info Agency 2018-10-12 19:24:40
On Oct. 11, IIA gained the news from the BMW Group: In the context of the 15th anniversary of BMW Brilliance Automotive (BBA), the BMW Group will acquire part of the equity of BMW Brilliance Automotive (BBA) for EUR 3.6 billion (approx. RMB 28.8bn), intending to increase its stake in BBA from 50 percent to 75 percent and becoming the first foreign company that benefit from phasing out share-holding limits for foreign investors in auto manufacturing sectors. At the same time, the BMW Group announced together with its partner Brilliance China Automotive Holdings Ltd. (CBA) the early extension of the joint venture contract and the further deepening of the existing successful collaboration. The extended contract is valid from 2018 to 2040. According to the plan, in the next few years, BMW will continue to implement its development strategies in China, including further investment and new capacity increasing.
On April 18, the National Development and Reform Commission announced that after the five-year transition period, all share-holding limits in the auto industry will be removed. For example, in 2018, limits for electric and plug-in hybrid vehicles will be scrapped. Those for commercial vehicles will be lifted in 2020. Those for passenger vehicles will be removed in 2022, and the restrictions on no more than two joint ventures will be cancelled. The BMW acquisition of BBA will be completed by 2022, catching up with the time limit for policy cancellation.
As the first auto joint venture that broke the 50:50 share-holding, the change in the equity of BBA is easy to draw attention. Actually, this historic interaction has already taken shape earlier this year. In July, among the auto collaborations between the two countries witnessed by the Chinese Premier Li Keqiang and German Chancellor Angela Merkel, the "BMW Group will hold over 50% of BBA’s share” is regarded as an important achievement of deepening cooperation between China and Germany. As the first beneficiary of the Chinese government easing the restrictions on foreign investment in the auto industry, it can be said that BMW has taken the lead in the industry and will pose a profound impact on the development of the industry.
Moreover, three billion euros investment is to upgrade and expand the new and existing plant in Shenyang. In Tiexi, a new plant on the existing plant ground will double the site’s capacity, while extensive remodeling and expansion measures will target the neighboring plant in Dadong. Production capacity there will remain the same, but the structure of the plant will gradually be expanded for future BMW model variants and the expected market growth. In the next 3 to 5 years, the total annual production capacity of BMW automobiles at the BBA plants will gradually increase to 650,000 units from the early 2020s, creating 5,000 new jobs.
“BMW is the first foreign company that benefit from phasing out share-holding limits for foreign investors in auto manufacturing sectors in China. We are consistently following our growth strategy for China. With continuous investment, as well as the development and production of electric vehicles, we underline China’s importance as a dynamic growth market for us,” said Harald Krüger, Chairman of the Board of Management of BMW AG. “Our success story goes hand in hand with the success of the joint venture BBA. Together with our partners, we contribute to the sustainable development of the Chinese market,” he added.
“Over the past two decades, the BMW Group has participated in and benefited from China's reform and opening up. Facing the future, we are fully confident in China's further reform and opening up and the sustainable growth of the economy. China is becoming an important power of innovation-driven, especially in the digital arena. As an essential part of the BMW Group's global strategy, we will continue to invest more and wider in China, the largest single market for BMW, bringing more and better innovative products and personalized services to Chinese customers. “said Jochen Goller, President and CEO of BMW Group Region China.
Currently, six BMW models are produced in Shenyang: Plant Tiexi manufactures the BMW 1 Series Sedan, the BMW 2 Series Active Tourer, the BMW 3 Series Sedan (including Long Wheelbase version) and the BMW X1 (including plug-in hybrid version). At Plant Dadong, the BMW 5 Series Long Wheelbase version (including plug-in hybrid version) and the BMW X3 are manufactured. From 2020, the fully-electric BMW iX3 will also roll off the production line at Plant Dadong, its sole production location, and be exported from China to markets worldwide.
The history of share-holding limits for foreign investors in the auto manufacturing sector has existed for over 20 years. Regardless of China's entry into the WTO and the decrease of China's auto tariffs for several times, the limits have remained unchanged until this April. As the first beneficiary and the first mover, the change in equity between the BMW Group and BBA will undoubtedly have far-reaching effects in the process of further opening up of China's auto industry.
