BMW will take control of Brilliance Automotive

The BMW, BMW, auto industry giant wants to take control of its joint venture in China and is preparing to inject additional billions into its production capacity in the country.

The German company will spend 3.6 billion euros ($ 4.16 billion, 3.14 billion pounds) to increase its stake in Brilliance Automotive from 50% to 75%.

The mining company will also invest more than 3 billion euros to expand its existing production capacity in China.

This decision came as China planned to relax the rules applicable to foreign car manufacturers operating in its huge market.

Currently, foreign companies wishing to manufacture cars in China must establish a joint venture with a local company, but they are not allowed to hold more than 50% of the company's capital.

This rule has been in place since 1994 and leaves many foreign companies frustrated. It has also prevented major global brands from fully accessing the world's largest auto market.

BMW said the agreement with Brilliance Automotive, which is subject to regulation and shareholder approval, could not be reached until 2022. It is at this time that the requirement 50/50 joint venture for the manufacture of cars in China will end.

"The total annual production capacity of the BMW Brilliance Automotive (BBA) factories [in China] BMW President Harald Krüger said Wednesday in a speech Wednesday that the number of vehicles will increase gradually to 650,000 units.

BBA was the cornerstone of BMW's continued success in China – its largest single market – and that, thanks to the increased investment the German company wanted to achieve, it would be able to produce up to 100% of electric vehicles.

The Chinese government said it wants 20% of the cars sold to be electric vehicles or plug-in hybrid vehicles by 2025.

In February, BMW announced the construction of Mini Electric Cars in China with the manufacturer Great Wall Motor. The cars manufactured under this partnership are destined for the Chinese market.

Brilliance China Automotive Holdings is the owner of BMW Brilliance Automotive.