BMW Group extends JV contract with Brilliance to 2040, increases stake to 75%; €3B investment in plants
The BMW Group and Brilliance China Automotive Holdings Ltd. (CBA) announced the early extension of the joint venture contract for BMW Brilliance Automotive (BBA) and the further deepening of the existing successful collaboration.
The extended contract is valid for 22 years (from 2018 to 2040). Furthermore, the BMW Group intends to increase its stake in BBA from 50% to 75% and both partners have today signed a corresponding agreement. This transaction is subject to the approval of the relevant authorities and the consent of the CBA Shareholders’ Meeting.
At the same time, the joint venture also announced an investment of more than three billion euros in new and existing plant structures in Shenyang over the coming years. 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. As a result, 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.
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. 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.—Harald Krüger, Chairman of the Board of Management of BMW AG
In 2017, the BBA automotive plants in Tiexi and Dadong produced almost 400,000 vehicles. 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.
In the past 15 years, BBA has become a cornerstone of the BMW brand’s success in China, the brand’s biggest single market. In 2017, around 560,000 BMW brand vehicles were delivered to customers in China. Two-thirds of all BMW vehicles sold in China last year were produced by BBA at the two automotive plants in Tiexi and Dadong.
With a proven dealer network, a total of 16 new products for launch in 2018 and an ongoing product roll-out in the upcoming years, the BMW Group strives to continue its success in China. In the first eight months of 2018, deliveries increased by 4.2% and, for the first time, exceeded 400,000 units.
The BMW Group anticipates strong growth in demand for electric and electrified vehicles in China. With six electrified models currently available, the BMW Group offers Chinese customers the widest range of options in the premium segment. In 2017, the BMW Group more than doubled its sales of electrified vehicles in China from the previous year and expects this growth to continue in 2018.
With its highly flexible production system, the new plant in Tiexi will be able to build vehicles with fully electric, partially electric and conventional drivetrains on a single production line.
In addition to its two existing vehicle plants, BBA opened its own battery factory in Tiexi a year ago. In May 2018, the company laid the foundation stone for a major expansion of this battery factory. The new “High-Voltage Battery Centre Phase II” will produce new, more powerful batteries with fifth-generation BMW eDrive technology for the fully-electric BMW iX3.