BEIJING, Oct. 11 (SEE)- German automaker BMW agreed to increase its stake in joint venture Brilliance China Automotive.
The move aimed at capitalizing on Beijing’s decision to make more foreign investments.
BMW said it would raise its stake in the joint unit to 75% from 50% in a deal worth 3.6 billion euros to be completed in 2022.
The Chinese government has announced that it plans to abolish the limits of foreign ownership in automobile projects by the same year.
BMW said it had agreed with its Chinese partner to extend the contract of their BMW Brilliance Automotive until 2040 instead of the current 2028 deadline.
“The acquisition of additional shares in the project would require approval from the authorities and the approval of Chinese shareholders in Brilliance,” BMW said.
According to the agreement, the German automaker intends to increase the production capacity of existing plants in Shanghai.
The total production of cars in the project plants is expected to increase to 650,000 units per year in early 2020, adding 5,000 new jobs.
During 2017, about 560,000 BMW vehicles were delivered to customers within China.
According to the statement, two-thirds of the BMW cars sold in China last year were produced by the joint venture.