BMW is paying $4 billion to take control of its China business

BMW is racing ahead of other global automakers in China.The German company said Thursday that it will...

Posted: Oct 11, 2018 1:17 PM
Updated: Oct 11, 2018 1:17 PM

BMW is racing ahead of other global automakers in China.

The German company said Thursday that it will pay €3.6 billion ($4.2 billion) to take control of its business in China. It's the first international carmaker to announce this kind of deal since the Chinese government moved earlier this year to relax ownership restrictions.

Asia

BMW

China

Companies

Continents and regions

East Asia

Automotive industry

Business and industry sectors

Business, economy and trade

International trade

Trade and development

Under the deal with its Chinese partner, Brilliance China Automotive Holdings, BMW (BAMXF) will increase its stake in their joint venture by 25% to 75%.

The deal is expected to close in 2022, the year when China will lift the ownership limit on car manufacturing operations.

The move will dramatically deepen BMW's involvement in the world's largest car market and help protect it against disruptions caused by trade conflicts and tariffs.

BMW sold 560,000 cars in China last year — more than the United States and Germany combined.

But that business has come under threat after Beijing placed new tariffs on American vehicles in July in retaliation for US taxes on Chinese exports worth tens of billions of dollars.

BMW tried to pass the cost of those tariffs onto customers in China by hiking prices for the SUVs it exports there from the United States, which is home to its biggest production plant.

The company followed that with a profit warning in September, blaming in part "continuing international trade conflicts."

Betting on clean vehicles

"We are now embarking on a new era," CEO Harald Krueger said during a speech in China on Thursday. "China is quickly becoming an important development and production base for BMW new energy vehicles."

As part of the deal, BMW said it would invest up to €3 billion ($3.5 billion) to build new facilities and upgrade existing operations in Shenyang. It said annual production would hit 650,000 units by the early 2020s.

BMW builds several hybrid models in China, and it will export the fully-electric BMW iX3 from the country starting in 2020. It has also joined the board of Apollo, an autonomous driving project from Chinese internet firm Baidu (BIDU).

The Chinese market has gotten a lot tougher for foreign automakers this year as the wider economy has lost momentum and the trade war with the United States has ramped up.

Yale Zhang, managing director at Shanghai-based consultancy Automotive Foresight, said that the slowdown should be temporary. By taking control of its China business, BMW would be in a better position than its competitors when the market rebounds, he added.

"The car market, especially premium segments, will still grow fast when more people try to replace or upgrade their ... family car," he said.

Huntsville
Broken Clouds
79° wxIcon
Hi: 83° Lo: 68°
Feels Like: 81°
Florence
Few Clouds
80° wxIcon
Hi: 85° Lo: 70°
Feels Like: 83°
Fayetteville
Broken Clouds
77° wxIcon
Hi: 82° Lo: 68°
Feels Like: 79°
Decatur
Scattered Clouds
78° wxIcon
Hi: 83° Lo: 68°
Feels Like: 80°
Scottsboro
Broken Clouds
81° wxIcon
Hi: 82° Lo: 67°
Feels Like: 85°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Confirmed Cases: 18766

Reported Deaths: 651
CountyConfirmedDeaths
Mobile2284118
Jefferson1884103
Montgomery182343
Tuscaloosa82216
Marshall7059
Franklin5788
Lee55834
Shelby52220
Tallapoosa43266
Butler41918
Walker3812
Elmore3729
Chambers35926
Madison3464
Morgan2981
Unassigned2972
Baldwin2929
Dallas2873
Etowah26212
Lowndes25912
DeKalb2573
Autauga2395
Coffee2391
Sumter2287
Houston2265
Bullock2156
Pike2080
Colbert1872
Hale1799
Russell1770
Barbour1771
Marengo1746
Lauderdale1692
Calhoun1653
Wilcox1547
Choctaw15310
Cullman1501
Clarke1492
St. Clair1311
Randolph1287
Marion12411
Dale1230
Pickens1215
Talladega1175
Limestone1080
Chilton1051
Greene954
Winston910
Macon874
Jackson833
Henry812
Covington811
Crenshaw783
Bibb761
Escambia753
Washington726
Blount631
Lawrence510
Monroe452
Geneva440
Perry420
Conecuh411
Coosa401
Cherokee383
Clay282
Lamar260
Fayette160
Cleburne151

Tennessee Coronavirus Cases

Confirmed Cases: 24833

Reported Deaths: 388
CountyConfirmedDeaths
Davidson542965
Shelby5428119
Trousdale13944
Rutherford132128
Hamilton93516
Sumner93146
Lake8350
Bledsoe6101
Williamson57711
Putnam5196
Robertson5165
Tipton4593
Wilson4428
Knox4365
Out of TN4264
Bedford2954
Montgomery2833
Rhea2140
Hardeman2010
Madison1732
Bradley1611
Unassigned1610
Macon1583
Loudon1570
McMinn14414
Cheatham1350
Fayette1252
Cumberland1191
Dickson1180
Maury1050
Sevier942
Blount933
Washington750
Coffee740
Monroe692
Wayne640
Gibson631
Sullivan602
Lauderdale591
Hickman580
Dyer570
Franklin541
Greene522
Unicoi480
Obion433
Hamblen432
Marion421
Anderson411
DeKalb380
Smith371
White340
Hawkins342
Marshall331
Lawrence330
Haywood332
Overton320
Cannon320
Grundy311
Henry310
Lincoln290
Jefferson280
Carroll281
Meigs270
Weakley260
Warren260
Perry240
Hardin222
Cocke210
Sequatchie190
Carter191
Johnson190
Jackson190
Polk180
Campbell181
Morgan170
Roane160
Crockett162
Humphreys151
McNairy150
Henderson150
Stewart130
Claiborne120
Chester120
Fentress120
Giles120
Scott120
Grainger110
Clay80
Houston80
Benton71
Moore50
Decatur50
Van Buren40
Union40
Pickett30
Lewis30
Hancock10

 

 

Community Events