Introduction: Looking at BMW Brilliance, which accounts for 75% of the shares, the beam car that was born only three years ago is instantly out of flavor?
The 2021 global sales champion of luxury cars, BMW Group, finally successfully completed the capital increase and share expansion of BMW Brilliance and extended the contract until 2040. BMW Brilliance is not the first foreign-controlled joint venture car company – before it, Volkswagen acquired absolute control of JAC Volkswagen through a capital increase.
However, as a well-known luxury brand, BMW Brilliance, which has a large volume, is the first joint venture company in China to announce a change in its share ratio. Therefore, the impact of BMW's completion of the change in the shareholding ratio of the joint venture company, compared with jianghuai volkswagen, which was born a few years ago, will inevitably have a profound impact on the Chinese auto market.
1) Many joys and sorrows
According to the data of the Association, BMW Brilliance's cumulative sales in 2021 exceeded 650,000 vehicles (BMW Group reached 840,000 vehicles); in January this year, BMW Brilliance retail sales were as high as 89,000 vehicles, an increase of 20.4% year-on-year, in the top 15 list of manufacturers' sales, its growth rate only lagged behind BYD, and it was the only luxury brand to enter the TOP 10.
With the BMW Group owning 75% of the joint venture, its profitability will rise to a higher level. According to BMW's official information, the bmw brilliance share ratio change can bring it 7 billion to 8 billion euros in revenue and increase free cash flow by about 5 billion euros.
Brilliance Group, the Chinese shareholder of BMW Brilliance, which is in bankruptcy and restructuring, also received 27.941 billion yuan in cash paid by BMW Brilliance for selling 25% of BMW Brilliance's equity. This is a "charcoal in the snow" for Brilliance Group, which has total debt of more than 130 billion yuan and is in urgent need of external funds to bail out.
Even owners who buy BMW in the future may not have to bother to cut off the raised tail logo "BMW Brilliance" on the car like previous owners. Foreign shareholders, consumers, and Chinese shareholders all seem to have become beneficiaries to some extent, and they are all happy.
In order to accelerate the profitability of the Chinese market, BMW's product planning in China in the next few years is also unprecedented, such as the domestic BMW X5. BMW Group said it will continue to increase investment in China, including the construction of new factories in Shenyang's Dadong District and Tiexi District, as well as increasing the variety of locally produced models and introducing more pure electric vehicle models.
However, Brilliance's assist, or the strategy played by bmw group, may make another Local Chinese brand passive.
On July 9, 2018, bmw group and Great Wall Motors jointly funded the establishment of Beam Motors. Although the new industrial policy of opening up the joint venture share ratio for passenger cars has been announced at the time of the signing of the contract with Great Wall Motors, the BMW Group still established a joint venture with Great Wall Motor at a 50:50 share ratio.
At that time, it seemed that the two companies each accounted for 50% of the equity ratio, which meant that this cooperation was reciprocal and mutually beneficial and win-win. However, with the passage of time, as the BMW Group finally became the majority shareholder of BMW Brilliance, the relationship between it and the beam car became very delicate.
2) Heavy "north" light "south"?
Today, the BMW Group has accounted for 75% of bmw brilliance shares, with absolute control and voice; far greater than the 50% of the beam car. Will this affect BMW's future development, emphasizing "north" and light "south"?
From some details, it can be seen that after the joint venture, the BMW Group's emphasis on beam cars may change somewhat, and it may be as Jianghuai Automobile insiders once told the author, one is basically equivalent to the parent, and the other cannot be said. The current resources and importance that Volkswagen Group attaches to Volkswagen Anhui (formerly Jianghuai Volkswagen) is also significantly higher than that of North and South Volkswagen from the perspective of planning.
Back to the change in BMW Brilliance's share ratio and the establishment of a joint venture between Great Wall and BMW. For example, at the launching ceremony of the beam car held at the end of 2019, in the presence of Wei Jianjun, chairman of Great Wall Motor, the current chairman of the BMW Group, Chiputzer, did not appear, and was replaced by Fu Lexi, a director of the BMW Group responsible for research and development.
The joint venture was once regarded by the outside world as a high-level cooperation between the two major Car companies in China and Germany at the group level. For BMW, Beam Auto is not only BMW's second joint venture in China, but also BMW's first pure electric vehicle joint venture project in the world. In the face of the launching ceremony of such a significant project, the absence of the chairman of the BMW Group is more or less surprising.
In fact, before the initiation ceremony, the discordant notes have already been heard. In August 2019, the German media exposed that the BMW Great Wall joint venture project may face termination due to the decline in BMW's profit in the first half of the year.
Although Great Wall Motors immediately issued an announcement that everything was going well, it was still inevitable that people would have doubts about the bmw group's sincerity of cooperation. Perhaps, it is precisely because of BMW's hesitation that the joint venture project has dragged on for more than 500 days from launch to implementation (the beam car project began in April 2016 and did not land until November 29, 2019).
Considering again, the beam car does not use the name of the parent company of both parties; does not hang the parent company LOGO; and does not build independent sales channels. These indications show that BMW and the Great Wall are more like beam cars as one of the pilot projects for the development of new energy vehicles.
After all, Great Wall Motors is also a rich local Chinese car company, and has unique advantages in parts and batteries. Audi already has two partners and three joint ventures, and BMW also has to think about the long term.
Regardless of the past, beam cars have been officially launched in Zhangjiagang City, Jiangsu Province, and will be completed and put into operation this year. If you want to win the favor of BMW in the years to come, do not let the "big brother" BMW Brilliance steal all the limelight, but also look at the future performance of beam cars.
According to the plan, the annual production capacity of the joint venture project will be 160,000 units, and two production lines will be built for pure electric vehicles and fuel vehicles. It is worth noting that the two sides will jointly develop a new electric vehicle platform. This Sino-German hybrid pure electric compact SUV, close to the BMW mini, has a 78KWh battery and a range of more than 550km.
Considering BMW's attitude toward electrification, the author believes that the market performance of this SUV jointly developed by the two parties of the joint venture is likely to determine the future position of beam cars within the BMW Group. If the car can be recognized by the market and let BMW get out of the shadow of the i3 loss, then BMW is likely to follow the trend to tilt its resources and become bigger and stronger. Even like the "North and South Volkswagen", build a "North and South BMW". If the new car and the i3 suffer the same fate, BMW can also rest assured that it can run its absolutely controlled BMW Brilliance.
It is noteworthy that the BMW Group recently said that for the Chinese market, the first two MINI electric vehicles will be introduced, which will be produced by Beam Cars. At the same time, it will also launch localized models produced in Shenyang, as well as continue to introduce imported MINI models. BMW "south" and "north" at the same time, what the result is, let us wait and see.