BMW ramps up investment in China to meet electric demand

BMW CEO Harald Krueger, right, underlined the importance of China to the German automaker, saying the country, with its increased demand for electric vehicles, is a dynamic growth market for his country. (AP Photo)
Updated 11 October 2018
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BMW ramps up investment in China to meet electric demand

  • Munich-based BMW said it would pay €3.6 billion to raise its stake in BMW Brilliance Automotive Ltd. to 75 percent
  • BMW will invest in new and existing plant facilities in Shenyang, increasing production capacity to 650,000 vehicles a year from the early 2020s

FRANKFURT: German automaker BMW is taking a majority stake in its China joint venture and investing €3 billion ($3.5 billion) in factories there, underscoring the importance of the Chinese market as the company prepares to meet increased demand for electric vehicles.
Munich-based BMW on Thursday said it would pay €3.6 billion to raise its stake in BMW Brilliance Automotive Ltd. to 75 percent from 50 percent.
Alongside the deal, BMW will invest in new and existing plant facilities in Shenyang, increasing production capacity to 650,000 vehicles a year from the early 2020s. The plants produced 400,000 vehicles last year.
A new plant will be able to produce fully electric, partly electric, and conventional vehicles on the same line.

 

The Chinese government has issued a new energy vehicle mandate which uses a system of credits to push automakers to increase the share of battery-only and hybrid cars in their sales mix.
The policy is expected to increase the number of electrically powered vehicles in the world’s largest car market over coming years.
Last year, battery-only and hybrid cars were 2.2 percent of the Chinese market; the International Council on Clean Transportation estimates that could rise to around 4 percent by 2020 under the policy.
The country is BMW’s single largest sales market, with 560,000 vehicles sold there last year.
The deal is subject to approval by regulators and shareholders of Chinese partner Brilliance China Automotive Holdings.
BMW is taking advantage of the Chinese government’s plans to end the requirement that foreign auto manufacturers enter into joint ventures with local partners in order to make cars in China. The BMW-Brilliance deal is scheduled to close in 2022, the year the requirement ends.
“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,” BMW CEO Harald Krueger said in a statement.

FASTFACTS

China is BMW’s single largest sales market, with 560,000 vehicles sold there last year.


Saudi Aramco signs joint venture for refining and petrochemical complex in China

Updated 2 min 17 sec ago
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Saudi Aramco signs joint venture for refining and petrochemical complex in China

  • The partners will create a new company, Huajin Aramco Petrochemical Co. Ltd., as part of the project
  • Saudi Aramco will supply up to 70 percent of the crude feedstock for the complex

DUBAI: Saudi Aramco on Friday signed an agreement to form a joint venture with NORINCO Group and Panjin Sincen to develop a fully integrated refining and petrochemical complex, located in the city of Panjin in the Liaoning province of China.
The partners will create a new company, Huajin Aramco Petrochemical Co. Ltd., as part of a project that will include a 300 thousand barrel per day refinery with a 1.5 million metric tons per annum (mmtpa) ethylene cracker and a 1.3 mmtpa PX unit. Saudi Aramco will supply up to 70 percent of the crude feedstock for the complex, which is expected to start operations in 2024.
Saudi Aramco CEO Amin Nasser, in a statement, said: “Our agreement today with NORINCO and the Liaoning province is a clear demonstration of Saudi Aramco’s strategy to move from beyond a buyer-seller relationship, to one where we can make significant investments to contribute to China’s economic growth and development. Our participation in the integrated refining and petrochemical project in Panjin will strengthen our collaborative efforts to enhance energy security, revitalize key growth sectors and industries in Liaoning and also meet rising demand for products and goods in China’s Northeast region.”
There are additional plans to establish a fuels retail business, which will further integrate into the value chain. By the end of 2019, a three-party Marketing JV Company is expected to be formed between Saudi Aramco, North Huajin and Liaoning Transportation Construction Investment Group Co., Ltd. to develop a retail fuel stations network in the target markets.