BMW confirms expansion in China
Attending the celebration, Chancellor Angela Merkel and Prime Minister Li Keqiang witnessed the signing of BMW’s engagement to continue and enhance its Chinese joint venture BMW Brilliance Automotive (BBA).
The alliance between the Chinese automaker Brilliance and BMW has been a success for 15 years, resulting in 384,100 registrations in 2017 for locally produced cars (within the BBA alliance) on top of 210,300 imported vehicles registered in China (source: BMW Investor Presentation June 2018; includes Mini). This makes China BMW’s biggest market with a volume that exceeds the US and Germany’s consolidated volumes.
To date, BMW produces the 1 Series Sedan, the 2 Series Active Tourer, the 3 Series, the 5 Series, the X1 and soon the X3 in China. The Munich-based OEM has 598 BMW outlets and 135 Mini outlets in China. Vehicles are produced in 2 factories, in Dadong and Tiexi. BBA employs 16,800 people in China.
Increased capacity and new global model
A first highlight of the renewed collaboration is the plan to increase production capacity, spread over the 2 factories, to 520,000 units. This will probably have an impact on the ratio of locally produced units versus imported units in favour of the BBA JV as well as on the overall sales figures (import/locally produced combined).
In addition to the increase of local production volumes, BMW has also announced that the all-electric iX3 will be produced in China, but not only for the Chinese market; BBA plans to export this vehicle to markets outside of China.
Both of BBA’s plants are located in the province of Liaoning, which is located in the North-East of China, at the northern border with North-Korea, with direct access to the Yellow Sea and the East China Sea. Unlike Tesla, who’s planning to build a plant in the expensive Shanghai area, BMW has made a strategic choice to establish production in a location where the land price is not extremely high and where the steel industry has been present for many years. Also, Liaoning offers an easy access to Beijing over the road and other cities by sea, which will help the distribution of global models, such as the iX3.
Yumin Qi, Chairman, Brilliance Automotive Group Holdings was heard saying: “This joint success is also driving the economic development of Liaoning province, adding jobs and prosperity to thousands of our associates in the region.”
The iX3 will be produced in Shenyang, in the middle of the Liaoning province, where BBA operates a battery factory.