On February 11, the BMW Group announced that from February 11, 2022, the new joint venture contract of BMW Brilliance Automotive Co., Ltd. (hereinafter referred to as "BMW Brilliance"), a joint venture of the BMW Group in China, came into effect, and the validity period of the joint venture between the two parties was extended to 2040. The BMW Group's stake in BMW Brilliance was changed to 75%, and Brilliance China Automotive Holdings Limited (hereinafter referred to as "Brilliance China") indirectly held the remaining 25% of the shares.
Since then, BMW Brilliance has become the first joint venture in China with a foreign shareholding ratio of more than 50%.
"In the BMW Group's transformation to electrification, digitalization and sustainable development, China, as a leader in these aspects, is our best choice and best partner. The new joint venture contract extended to 2040 and the approval of the related BMW investment project in Liaoning are the latest examples of China's expansion of high-level opening up, especially in the automotive industry. Gao Le, President and CEO of the BMW Group greater China, said.
Since January 1 this year, in accordance with the Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition) issued by the National Development and Reform Commission and the Ministry of Commerce, the restriction on foreign ownership in passenger car manufacturing and the restriction that the same foreign investor can establish two or fewer joint ventures producing similar vehicle products in China have been abolished in the automobile manufacturing sector.
BMW Brilliance was founded in 2003 and holds 50% of the shares of both parties. In October 2018, on the occasion of bmw brilliance's 15th anniversary, BMW acquired a 25% stake in BMW Brilliance for 3.6 billion euros, breaking the 50:50 shareholding management of the joint venture automotive company and increasing its shareholding ratio to 75%. At that time, according to the new national industrial policy, BMW Holding Brilliance took effect in 2022.
It is reported that at the same time as the new joint venture contract was approved, BMW continued to invest in liaoning. On February 9, it was reported that BMW Brilliance has confirmed that the MINI brand will have localized models produced in Shenyang. According to the commitment, BMW will continue to expand its production capacity in China and introduce more pure electric vehicle models for domestic production, while also increasing the scale of procurement in China. In 2021, BMW Brilliance's total procurement in China will reach nearly 33 billion yuan.
Over the past decade, BMW Brilliance has invested more than 10 billion euros (about 72.4 billion yuan) in Liaoning Province. In 2021, bmw group sales in China will be 850,000 units (including MINI), an increase of 9% year-on-year, accounting for 40% of the total global sales, of which BMW Brilliance's total production exceeds 700,000 units.
It is worth noting that brilliance group and its joint venture renault brilliance have filed for bankruptcy reorganization, and for this matter, bmw group executives said, "this has nothing to do with BMW Brilliance.".
Regarding the adjustment of the share ratio, BMW Brilliance will be fully incorporated into the group financial statements of the BMW Group, which may bring a positive impact of 7 billion to 8 billion euros (about 50.7 billion to 57.8 billion yuan) to the financial data of BMW's automotive division.
(Wen 丨 "Finance and Economics" Weekly Wang Xin Editor 丨 Mao Shiyang)
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