World Car News #Update
The BMW AG has just put its chips on the table in China. Earlier this week, BMW sealed a separate venture to produce electric vehicles and other cars with partner ‘Great Wall Motor Co.’ On Monday, it agreed with Brilliance to lift output in the nation to more than 500,000 cars.
The German company could become the first foreign carmaker to own a majority stake in a Chinese joint venture as it mulls a new ownership structure for its arrangement with Brilliance China Automotive Holdings Ltd. BMW’s interest may rise to as much as 75 percent, Germany’s Manager Magazin reported.
China has worked well for BMW so far, It’s got more than 700 outlets for its own brand and the Mini marque, and revenue from the country now accounts for almost 20 percent of BMW’s total.
It’s been lucrative, too. Investment income from China in the first quarter rose from 33% to 223 Million Euros ($261 million). (BMW accounts for its Brilliance stake as an investment under equity-accounting rules whereas other firms usually report straight equity income. If BMW followed suit, that number could be even higher.)
And demand in the world’s largest car market remains squarely concentrated in BMW’s target segment: premium. During the first three months of 2018, sales of BMW’s cars through its Brilliance joint venture accounted for 70 percent of the total, up from 63 percent in the same period last year.