BMW AG sees a profit of 8 billion euros in profits from the acquisition of the car manufacturing consortium in China, sending one today to its bonds that it pays to take control of the activities in the largest car market in the world.
Chinese authorities have given BMW permission to increase its stake in Brilliance China Automotive Holdings to 75% from 50%, the German company said.
The move will lead to a positive, emergency impact of € 7.8 billion for BMW’s core car segment.
BMW is one of the first Western automakers to benefit from the easing of foreign ownership rules by China – at one point – a milestone for the industry.
China is BMW’s largest national market, accounting for a third of global deliveries last year.
Its consortium there manufactures BMW models for sale in the country, and all iX3 electric SUVs for export to markets worldwide.
Before the new looser rules came into force this year, international companies were not allowed to own more than 50% of each of their Chinese joint ventures, and had to share profits with local partners.
Tesla Inc. was a notable exception, with government officials allowing it to take full control of its local subsidiary.
“Today marks a milestone as we continue to extend our long-standing and successful commitment to China,” said Oliver Zipse, CEO of BMW.
Source: Capital
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