Oct 11, 2018
• Early extension of the existing joint venture contract until 2040
• Investment of more than three billion euros in new automotive plant and large-scale expansion of existing plant structure
• Total production capacity of 650,000 units per year and 5,000 new jobs in the BMW Brilliance plants by the early 2020s
• Harald Krüger: “Success story goes hand in hand with BMW Brilliance”
Munich/Shenyang. The BMW Group sets the course for the next chapter of its successful business development in China. With a long-term contract extension for the joint venture BMW Brilliance Automotive and extensive investments for further expansion of the production capacity, the company plans to drive dynamic growth in the world’s largest automobile market.
Today, the BMW Group celebrated the 15th anniversary of its highly successful BMW Brilliance Automotive joint venture in China with its partner, Brilliance China Automotive Holdings Ltd. At the official ceremony, the two partners announced the extension of their joint venture contract early and to thus deepen the successful cooperation. The extended contract is valid for 22 years (from 2018 to 2040). The enhanced partnership also further strengthens the successful relations between China and Germany. Premier Li Keqiang and German Chancellor Angela Merkel both sent congratulatory letters to mark the occasion.
BMW Brilliance also announced an investment of more than three billion euros in new and existing plant structures in Shenyang over the coming years: In Tiexi, a new plant will double the site’s capacity. Other extensive remodelling and expansion measures will target the neighbouring plant in Dadong. Production capacity there will remain the same, but the structure of the plant will gradually be expanded for future BMW model variants and the expected market growth. As a result, the total yearly production capacity of BMW automobiles at the BMW Brilliance automotive plants will gradually increase to 650,000 units from the early 2020s and will create 5,000 new jobs.
“We are consistently following our growth strategy for 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,” said Harald Krüger, Chairman of the Board of Management of BMW AG. “Our success story goes hand in hand with the success of the joint venture BBA. Together with our partners, we contribute to the sustainable development of the Chinese market,” he added.
BMW Brilliance lays the foundation for BMW brand’s success in China
The anniversary celebration held at the BMW Brilliance plant in Tiexi/Shenyang was attended by Yumin Qi (Chairman & Party Secretary, Brilliance Automotive Group), Xiaoan Wu (Chairman, BMW Brilliance Automotive Ltd. and Chairman, Brilliance China Automotive Holdings Ltd.), Harald Krüger (Chairman of the Board of Management of BMW AG), Dr. Nicolas Peter (Member of the Board of Management of BMW AG, Finance and China Affairs), Oliver Zipse (Member of the Board of Management of BMW AG, Production), Jochen Goller (President & CEO, BMW Group Region China), Dr. Johann Wieland (President & CEO, BMW Brilliance Automotive Ltd.) and representatives of the local government.
“BMW Brilliance Automotive is a unique success story and provides an outstanding example of a strong partnership built on trust,” stated Yumin Qi, Chairman & Party Secretary, Brilliance Automotive Group. “This joint success is also driving economic development in Liaoning Province.”
“Today, we do not only celebrate 15 years of a strong and reliable partnership with Brilliance. Together, we have also laid the foundation for further growth of the BMW brand in China,” added Dr. Nicolas Peter, member of the Board of Management of BMW AG, responsible for Finance and China Affairs.
In the past 15 years, BMW Brilliance has become a cornerstone of the BMW brand’s success in China, the company’s biggest single market. Around 560,000 BMW brand vehicles were delivered to customers in China in 2017 – more than in the next two largest markets, the US and Germany, combined. In 2017, the BMW Brilliance plants in Tiexi and Dadong produced almost 400,000 vehicles. Currently, six BMW models are produced in Shenyang: Plant Tiexi manufactures the BMW 1 Series Sedan, the BMW 2 Series Active Tourer, the BMW 3 Series Sedan (including Long Wheelbase version) and the BMW X1 (including plug-in hybrid version). At Plant Dadong, the BMW 5 Series Long Wheelbase version (including plug-in hybrid version) and the BMW X3 are manufactured. From 2020, the fully-electric BMW iX3 will also roll off the production line at Plant Dadong, its sole production location, and be exported from China to markets worldwide.
“For more than two decades, BMW has both contributed to and benefited from China’s successful development driven by its stringent reform and opening-up policies. Looking forward, we are full of confidence in China’s continuous opening-up efforts leading to sustainable growth over the long run. Moreover, China is becoming the driving force of innovation, especially in the field of digitization. As an integral part of the global BMW Group strategy, we will continue to increase our investment and footprint in BMW’s single largest market and provide our Chinese customers with even more innovative products and personalized services.” stated Jochen Goller, President & CEO, BMW Group Region China.
With a reliable dealer network, a total of 16 new products for launch in 2018 and an ongoing product offensive in the upcoming years, the BMW Group strives to continue its success in China. With the wide range of R&D activities and extensive local production, the company is poised for future growth and makes a lasting contribution to the local market.
A leader in electromobility: full range of drive trains on a single production line
The BMW Group anticipates strong growth in demand for electric and electrified vehicles in China. As a leader in electromobility, the company is systematically gearing its production towards this. With six electrified models currently available, the BMW Group offers Chinese customers the widest range of options in the premium segment. In the first nine months of 2018, the sales of BMW Group's NEV models in the Chinese market increased nearly five-fold year-on-year, and the cumulative sales of two domestic NEV models exceeded 10,000 vehicles for the first time.
With its highly flexible production system, the new plant in Tiexi will be able to build vehicles with fully electric, partially electric and conventional drive trains on a single production line.
“We are expanding our production system in Tiexi with a new plant. This new plant, the existing engine plant and battery factory, will put us in an ideal position,” according to Oliver Zipse, member of the Board of Management of BMW AG, responsible for Production. “With our highly flexible production system, we can respond quickly to market demand and would be able to produce up to 100% electric vehicles.”
In addition to its two existing vehicle plants, BMW Brilliance opened its own battery factory in Tiexi a year ago. In May 2018, the company laid the foundation stone for a major expansion of this battery factory. The new “High-Voltage Battery Centre Phase II” will produce new, more powerful batteries with fifth-generation BMW eDrive technology for the fully-electric BMW iX3.
The BMW Brilliance Automotive (BBA) joint venture
The BMW Brilliance Automotive joint venture was founded in 2003. Over the past 15 years, it has become one of the most successful premium automobile manufacturers in China, encompassing production and sales of BMW automobiles in China, as well as local development tasks. In 2017, the BMW Brilliance automotive plants in Tiexi and Dadong produced almost 400,000 vehicles for the Chinese market – an increase of around 30% year-on-year.
Since 2009, BMW Brilliance Automotive has invested more than 52 billion RMB in its plants in Shenyang. The advanced production facilities are state-of-the-art, sustainable and showcases for “Industry 4.0”. By pioneering smart manufacturing, BMW Brilliance is contributing to China’s industrial upgrading and the revitalization of Northeast China. Since the founding of the joint venture, the supplier network of BMW Brilliance has expanded to more than 350 companies. More than 80 suppliers have set up locations in the Liaoning province. Since 2005, BMW Brilliance has been the largest annual taxpayer in Shenyang, with a tax payment of over RMB 24 billion in 2017 alone. In total, BMW Brilliance employs more than 18,000 employees.
“15 years of BMW Brilliance is a joint success story that we share with our partners and over 18,000 associates. With this additional investment, innovation and job creation, we will continue our high-quality development and drive economic growth in Liaoning Province,” said Dr. Johann Wieland, President & CEO, BMW Brilliance.