BMW's momentum in China is becoming more and more obvious.
At the end of 2021, BMW used a very warm "home in China" to show its determination to deepen the Chinese market. At the beginning of 2022, the BMW Group once again brought heavy news from the Chinese market.
On February 11, the BMW Group announced that with immediate effect, the new joint venture contract of BMW Brilliance Automotive Co., Ltd., a joint venture of the BMW Group in China, will come into effect. According to the new joint venture contract, from February 11, 2022, the BMW Group's shares in BMW Brilliance will be changed to 75%, and the partner Brilliance China Automotive Holding Co., Ltd. will indirectly hold the remaining 25% of the shares, and the validity period of the joint venture cooperation between BMW Group and its Chinese partners will be extended to 2040.
At this point, the first joint venture car company in China's automotive industry to break through the 50% shareholding limit of foreign investment has finally settled.
According to informed sources, after the completion of the share expansion, BMW Brilliance, in order to deepen the Chinese market, will also adopt a more balanced production capacity layout, go out of Shenyang, and build a new factory in southern China, a new factory or the production of new energy products.
Out of Shenyang BMW Brilliance will go south?
If the rumors are true, it will not come as a surprise.
Because on the one hand, although new energy vehicles and traditional fuel vehicles belong to the automotive industry, they are not too different. The traditional automotive industry is a typical heavy industry, while the new energy automobile industry is more inclined to high-tech industries.
However, high-tech industries do not have many development advantages in the north, especially in the northeast, and both talents and industrial clusters are relatively lacking. In contrast, high and new technologies have better development prospects in the south. A clear example is that many of the new car-making forces have built factories in the south. Many supporting enterprises of new energy vehicles are also in the southern region.
In addition, because the national policy guides the transfer of industry to the south, the construction of factories in the south can enjoy many policy support; at the same time, there are more coastal cities in the south, and building factories in the south can effectively reduce transportation costs.
From the perspective of the market environment, southern consumers have higher spending power on luxury cars and stronger acceptance of new energy vehicles. Therefore, in any way, for BMW Brilliance, building a factory in the south will be a very wise choice.
However, this will also bring another question, will BMW Brilliance go south to build a factory and produce new energy products, which will have an impact on Beam Auto, another BMW joint venture car company in China.
At present, the focus of BMW's development is still in BMW Brilliance. From the perspective of BMW Brilliance, this capital increase and share expansion, BMW Group added 25 billion yuan of investment, coupled with the previous investment amount, BMW Group in the past 13 years, the total investment in BMW Brilliance has reached 64 billion yuan; on the other hand, in the beam car cooperated with the Great Wall, from the 2018 media report on the signing amount, the total investment is 5.1 billion yuan, and both sides hold 50% of the shares. In other words, the investment paid by bmw group unilaterally is only 2.55 billion yuan. From the huge disparity in the amount of investment, it can also be seen that BMW's focus is BMW Brilliance.
China, BMW's most important link
In 2003, BMW and China's Brilliance Automotive joined forces to form a 50:50 joint venture, BMW Brilliance. At that time, this century-old world-class luxury car brand officially settled in Shenyang in China, and BMW Brilliance's Shenyang plant was also the world's largest BMW factory at that time, responsible for producing many of the best-selling models sold in China. These include models such as the 1 Series, 3 Series and Extended 5 Series, as well as a variety of SUVs such as X1, X2 and X3, iX3 electric vehicles, etc.
It was also from then on that BMW's deep binding with the Chinese market officially began.
According to the data, BMW Brilliance has become the largest taxpayer in Shenyang for 15 consecutive years since its establishment, with a tax payment of 38 billion yuan in 2020 alone. Last year, BMW Brilliance's total procurement in China was nearly 33 billion yuan, which effectively promoted the development of the local economy and actively supported the local government to build an advanced automobile manufacturing industry cluster.
Since 2010, BMW Brilliance has received a total investment of more than 73 billion yuan; it is worth mentioning that through the "BMW Start-up Garage" to cooperate with startups, more than 60 companies have successfully "graduated" since its establishment in 2015. These graduates have become an emerging force in the automotive industry. The huge digital lineup is precisely a portrayal of BMW and China's economic development at the same frequency.
Dr. Peter, Director of Finance at the BMW Group, said: "BMW Brilliance's success stems from the sincere cooperation of all parties involved. "Over the past decade, BMW Brilliance has invested more than RMB 73 billion in the region, and the BMW brand has become a leading high-end car brand in China with the full support of BMW Brilliance. The new joint venture contract has created favorable conditions for future-oriented and coordinated development. ”
In the nearly 19 years since the establishment of the joint venture in China, BMW has deeply understood the needs of Chinese consumers, which is most evident in sales. In 2021, BMW delivered a total of 846,200 BMW and MINI vehicles in China, an increase of 8.9% year-on-year, a new record in China. This is inseparable from BMW's emphasis on the Chinese market.
On December 21, 2021, BMW Group China described the company's China strategy upgrade at the "New Year Online Annual Meeting": to maintain synergy between the corporate strategy and China's development goals, uphold the "China first" principle, give priority to the needs of the Chinese market in the development of new products, and continuously strengthen the co-creation of win-win results with Chinese partners.
At the same time, BMW is also strengthening its relationship with Chinese partners. In 2017, BMW Brilliance was the first to establish a power battery center among high-end car brands, and completed the second phase of the project in 2020, with a total production of more than 100,000 power batteries so far. By the end of 2021, 360,000 public charging piles will be networked by BMW.
Today, BMW has established the largest R&D system in China outside of Germany. At the same time, China has become the largest single market in the world for the BMW Group for nine consecutive years.
Write at the end:
From the landing of the joint venture company in China to the expansion of BMW Brilliance, BMW has written a model of close ties between world-class luxury brands and China in less than 20 years.
After the capital increase and share expansion, BMW's future and the Chinese market will also be more "breathing, sharing the same destiny". According to the plan, China will become one of the three major production bases of new energy vehicles in the world by the BMW Group. The vigorous development of China's new energy market is also making China the consumer market with the most potential and the most consumption strength in the future of new energy vehicles.
There is no doubt that now with the new joint venture stage as the starting point, BMW's development in China will also enter a new situation.