BMW, Brilliance extend joint venture contract, make 3B euro investment
BMW Brilliance Automotive Ltd is galloping into a new phase of development, after 15 years of successful development in China, the world’s largest automotive market.
The joint venture’s parent companies, BMW Group and Brilliance China Automotive Holdings, last week extended their contract to 2040.
They also announced a massive 3 billion euro ($3.5 billion) investment in BMW’s manufacturing facilities in Shenyang, Liaoning province.
“These actions show a deep and long-term commitment to BMW Brilliance and set a clear course for our future,” said Johann Wieland, president of the company.
“It is the perfect way to celebrate our extraordinary 15-year journey, in the same year that China marks 40 years of successful reform and opening up.”
Wieland said the company has benefited a lot from the reform and opening up policy that China introduced in 1978, which has since created growth, prosperity and opportunities for people and businesses throughout the country.
“For the BMW brand, of course, it has given us access to millions of new customers who want to experience and enjoy our premium cars. Today, China is the largest single sales market in the BMW Group,” he said.
“Reform and opening up has also given us the opportunity to form our BMW Brilliance joint venture and build technology-leading BMW cars here in China. Our production base in Shenyang is one of BMW Group’s biggest worldwide.”
Established in 2003, BMW Brilliance has developed into one of the most successful premium carmakers in the country.
Its two plants — Tiexi and Dadong— are localizing six BMW models, with more to be introduced over the years, and last year they produced about 400,000 of some 560,000 BMW vehicles sold in China.
With the 3 billion euro investment, BMW Brilliance will build an additional plant in Tiexi, while Dadong will be remodeled for future vehicles.
“BMW has a clear principle: production always follows demand. Since we are seeing a strong market demand for our premium cars, BMW Brilliance is continuing to invest and increase production,” Wieland said.
When finished, the joint venture’s combined production capacity will reach 650,000 units a year, and the new Tiexi plant will be fully flexible to produce fully electric, partially
Reform and opening up has also given us the opportunity to form our BMW Brilliance joint venture and build technology-leading BMW cars here in China.” Johann Wieland, president of BMW Brilliance
electric and conventional drive trains on a single production line.
“We produce technology-leading BMW cars, engines and high-voltage batteries. And we are pioneering e-mobility in China,” Wieland said.
From 2020, the fully electric BMW iX3 will roll off the production line at the Dadong plant, and sold globally.
The batteries for the model will come from a battery plant the joint venture has built in its Tiexi plant. An expansion for the battery facility started earlier this year to produce more powerful products that feature the fifth-generation BMW eDrive technology.
Harald Krueger, chairman of BMW AG, said the German brand has been following a growth strategy in China.
“With continuous investment, as well as the development and production of electric vehicles, we underline China’s importance as a dynamic growth market for us,” he said.
BMW anticipates strong growth in demand for new energy vehicles in China. With six electrified models currently available in the country, the carmaker offers Chinese customers the widest range of options in the premium segment.
In 2017, BMW more than doubled its sales of electrified vehicles in China from the previous year. It expects such growth to continue in 2018.
Krueger said BMW’s success story in China goes hand in hand with the success of BMW Brilliance.
“Together with our partners, we contribute to the sustainable development of the Chinese market,” he added.
BMW Brilliance has been making great contributions to local economic development. It has been the largest taxpayer in Shenyang, Liaoning province since 2005. Last year, its tax totaled more than 24 billion yuan ($3.47 billion).
“With this additional investment, innovation and job creation, we will continue our high-quality development and drive economic growth in Liaoning province,” Wieland said.
BMW Brilliance has invested more than 52 billion yuan in its plants in Liaoning province since 2009.
The joint venture employs more than 18,000 workers. Since its founding in 2003, the number of its suppliers has risen to more than 350, of which around 80 have set up locations in Liaoning. Wieland said BMW Brilliance is committed to the task of revitalizing Northeast China. “Already, we are an engine for economic growth in the region, creating jobs, developing talent and fostering innovation. Furthermore, by helping our local suppliers to become worldclass, we are promoting excellence right along the value chain,” he said.