BMW Group agrees to establish a second plant in China with joint venture partner Brilliance Auto Group--New investment amounting to RMB 5 billion at the Shenyang location
(November 12, 2009. Beijing). Today at the Great Hall of the People, Beijing, the BMW Group and Brilliance China Automotive Holding Ltd. signed a Memorandum of Understanding affirming both shareholders’ strategic commitment towards further development of BMW Brilliance Automotive. Based on the previous successful development and excellent cooperation both shareholders agreed to start the next major phase for their joint venture BMW Brilliance Automotive. At the event, BMW Brilliance Automotive also signed an Investment Agreement with the Shenyang Municipal government.
According to the future plan, BMW Brilliance Automotive will invest into a Greenfield expansion in the Shenyang Economic and Technological Development Area in order to provide room for further growth while the stepwise increase of the capacity in the current plant in Dadong district, Shenyang, will be continued. The start of construction is planned for 2010.
The potential total production capacity will increase to more than 100,000 units in the 1st step. Pending on the further market development in China, the capacity can be gradually increased up to 300,000 units/year in line with growing market demand in the long term.
BMW Brilliance Automotive will increase the production of the BMW 3 Series and 5 Series Long Wheel Base while in parallel looking for opportunities of introducing new products meeting the Chinese customer demands. BMW Brilliance Automotive will continue to provide state-of-the-art technology to Chinese customers with existing and new models in order to achieve increased fuel-efficiency and lower emissions. The new production facility will combine cutting-edge technology with sustainability.
This will be supported by further localized R&D activities. The expansion will incorporate an engine plant. After recruiting already more than 600 new associates this year, BMW Brilliance Automotive will recruit and train more than 1,000 new associates in Shenyang in the progress of building up the new plant.
The overall long-term investment of BMW Brilliance Automotive for the new plant is expected to exceed RMB 5 billion.
Dr. Friedrich Eichiner, Board Member for Finance, BMW Group, and Mr. Qi Yumin, Chairman of Brilliance Auto Group, signed the Strategy Commitment between the two shareholders. BMW Brilliance Automotive Chairman Mr. Wu Xiaoan and President Mr. Olaf Kastner signed the Investment Agreement with Shenyang Vice Mayor Wang Ying and Mr. Li Songlin, Director of Shenyang Economic & Technological Development Area.
Dr. Michael Schaefer, German Ambassador to China and Mr. Chen Zhenggao, Governor of Liaoning Province spoke at the event. Mr. Li Yingjie, Mayor of Shenyang was present at the signing ceremony. Officials from National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Commerce and other relevant authorities of the central government also attended the event. Senior executives present today included Dr. Christoph Stark, President & CEO of BMW Group Region China, Mr. Zhao Jian, Board Member of Brilliance Group and Mr. Liu Zhigang, President of Brilliance Jinbei.
“China is currently the fourth largest market worldwide for the BMW Group”, said Dr. Eichiner. “The signing today shows that we are strengthening our long-lasting commitment to the Chinese market and to our joint venture. China’s economic dynamics is truly impressive and many experts expect this trend to continue. We want to be part of this development and continue to make an active contribution – for the benefit of our customers and the location Shenyang.
Mr. Qi Yumin said, “The event today shows that the cooperation between BMW Group and Brilliance Group is entering a new stage. As the Chinese shareholder, we are committed to providing full support to our joint venture.”
The BMW Group and its Chinese partner Brilliance Automotive each hold a 50% share in the joint venture. Since the establishment of the joint venture, a total of RMB 4.5 billion has been invested in Phase I.
The joint venture BBA has grown rapidly in the past 6 years, producing 150,000 units of the BMW 3 Series and 5 Series, all meeting the international BMW Group’s high standards. The achievements of the company’s Shenyang plant in environmental protection have been acknowledged through national and international certifications, demonstrating the company’s commitment to sustainability.
BMW Brilliance is committed to providing Chinese customers with state-of-art technology and exciting models equipped with EfficientDynamics. Currently, it offers 15 variants to Chinese customers including the BMW 5 Series Long Wheelbase, specifically tailored to the needs of Chinese customers.
Along with the process of implementing its localization strategy, BMW Brilliance has now developed a strong network of more than 150 local suppliers in China with a local purchase volume exceeding 4.4 billion RMB in 2008 alone. Currently, BMW has more than 130 authorized dealerships, 3 parts distribution centers, 2 training centers and 4 training bases, all contributing to the continual improvement of customer satisfaction.
BMW Brilliance has also actively assumed social responsibility and supported, among others, a wide range of educational and cultural initiatives, showing a strong commitment to corporate citizenship.
