The boots are finally on the ground!
On February 11, the BMW Group announced that with immediate effect, the new joint venture contract of BMW Brilliance Automotive Co., Ltd. ("BMW Brilliance"), a joint venture of BMW Brilliance in China, will come into effect. According to the new joint venture contract, from February 11, 2022, the BMW Group's shareholding in the joint venture BMW Brilliance will be changed to 75%, brilliance China's shareholding ratio will be changed to 25%, and the validity period of the new joint venture cooperation will be extended to 2040.
Although as early as 2018, BMW acquired 25% of BMW Brilliance for 3.6 billion euros, according to the policy, from January 1, 2022, the passenger car joint venture share ratio was officially liberalized, and the same foreign-funded enterprise will no longer be subject to the restriction of "the foreign shareholding of the joint venture automobile company cannot exceed 50%" and the restriction of establishing two or less joint ventures in China to produce similar vehicle products.
That is to say, starting from this year, foreign car companies can not only increase the share ratio or achieve sole proprietorship, but also set up more than two joint ventures to produce similar vehicle products, and BMW is the first joint venture car company to really eat crabs after the passenger car joint venture share ratio is released.
From the perspective of foreign car companies, with the increase of the share ratio, they will also enjoy higher voice and decision-making power in the Chinese market. Moreover, foreign investment, especially luxury car manufacturers like BMW, is more focused on the Chinese market, which is also conducive to accelerating the optimization of the market's competition mechanism and further promoting the internal circulation of industrial supply and demand through more advantageous resources.
However, since the new four modernizations are becoming an important outlet for the transformation of the current automobile industry, after the adjustment of the foreign equity ratio, in the new market field, will foreign investors be more aggressive in the decision-making and strategy of China's local market, but deviate from the original intention of localization? It remains to be seen.
BMW's "plot"
As we all know, in the international market, the Chinese market has always been the most important unit market for multinational car companies. In recent years, with the opening of the passenger car joint venture share ratio approaching, in addition to BMW, including Mercedes-Benz and Volkswagen actually have plans to increase the share ratio. Among them, Volkswagen has also increased its stake in JAC Volkswagen to 75%.
From the perspective of the "thoughts" of each family's change of stock ratio, behind the improvement of discourse power, in fact, there is more decision-making efficiency for future layout and the annual division of huge profits. Take the BMW Group, for example, in recent years, bmw's development in the Chinese automotive market is obvious to all. In 2021, BMW's sales in China reached a new high of 846,000 units, an increase of 8.9% year-on-year, surpassing Audi and Mercedes-Benz.
There is no doubt that in 2021, BMW Brilliance will once again become the largest source of profit for Brilliance Group. Judging from the contribution rate of both sides, in the state of internal and external troubles of Brilliance Group, BMW has in fact basically played the role of a leader.
However, it is worth noting that as an important engine and leading industry in Shenyang's automobile industry, equity adjustment also involves the complex game of BMW, Brilliance and local governments, so in order to better layout the Chinese market, BMW also needs to truly improve decision-making efficiency and execution efficiency.
Especially with the continuous maturity of the domestic new energy vehicle market, as a traditional luxury car manufacturer and the largest shareholder of BMW Brilliance, BMW needs to accelerate its market for the future. Judging from the BMW Group's previously upgraded China strategy and BMW's recent "expansion" actions, BMW has also made specific preparations for the "implementation" after the stock ratio adjustment.
It is reported that this year BMW will also take a new step to expand its production capacity in the Chinese market, and the existing factory in Shenyang's Dadong District is currently undergoing a comprehensive expansion, and a new factory in Tiexi District is also under construction.
At the same time, the BMW Group also said that it will introduce more pure electric models for domestic production this year. According to the previous BMW Group's upgraded China strategic plan, in 2022, BMW will form a matrix of 5 pure electric vehicle models in the Chinese market, including the pure electric BMW 3 Series produced in Shenyang.
The joint venture has entered the era of "strong alliance"
Although the real liberalization of the passenger car joint venture share ratio began on January 1, 2022, many joint venture car companies have already "sharpened their knives".
Previously, Mercedes-Benz has continuously reported the news of increasing the equity of Beijing Benz from 49% to 65%. Stellantis Group also recently announced that it plans to increase the joint venture GAC FCA shares to 75%, and Hyundai Motor has also been exposed to plan to increase the equity of Beijing Hyundai, kia has re-established a new joint venture relationship with Yueda Group, but the share ratio of the two sides has not yet been announced.
It is not difficult to guess that with BMW taking the lead in "landing", there may be a number of joint venture car companies in the domestic auto industry that will put the adjustment of the share ratio on the agenda, or readjust the strategic cooperative relationship between The Chinese and foreign parties to further promote internal renewal.
With the gradual concentration of discourse power into the hands of a stronger party, this actually means to some extent that the domestic auto market has entered a stage of independent market regulation in the true sense.
In other words, the survival of the fittest in the market will further intensify. In our view, the gradual liberalization of the shareholding ratio restriction is not only to provide a fairer competitive environment, but also to promote the automobile market to further rejuvenate and strengthen the competitive vitality.
Especially for those Chinese car companies that are declining, the relaxation of the restrictions on the share ratio will actually force some Chinese representatives to improve their competitiveness.
Like Volkswagen and Toyota's two car companies in China, the two north and south car companies, on the basis of China's strong enough strength, the two sides can achieve the situation and effect of "strong alliance". Otherwise, once the joint venture expires, with the gradual completion of the transformation of foreign car companies and the accumulation of more mature localization experience, weak enterprises will also accelerate the loss of discourse.
With the rise of the new energy market, a large number of Chinese national automobile brands have emerged under the new wind outlet, which have gradually got rid of their technical dependence on foreign capital and have absolute right to speak in the local market.
Red dot observation:
BMW fired the first shot at the release of the passenger car joint venture stock ratio, whether it is for BMW Brilliance or for the joint venture car companies, it is a new beginning and a new starting point. Of course, behind this new starting point, in fact, it also represents an era of more fierce competition, which is coming.
Therefore, it can be speculated that in the near future, in order to improve competitiveness, strong Chinese brands are also very likely to strategically unite with strong foreign car companies. At that time, the joint venture in the domestic automobile market will truly enter the era of "strong alliance".