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
0

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.


RBS says Saudi bank merger boosts its core capital

Updated 16 June 2019
0

RBS says Saudi bank merger boosts its core capital

  • RBS had a 15.3% interest in Alawwal bank
  • The changes would boost the banks CET1 core capital ratio by 60 basis points

Royal Bank of Scotland (RBS) said on Sunday the completion of a merger between Alawwal bank and Saudi British Bank would lead to RBS shedding $5.9 billion of risk weighted assets and boost its core capital.
RBS, through Dutch subsidiary NatWest Markets N.V., was part of a consortium including NLFI and Banco Santander S.A. that held an aggregate 40% equity stake in Alawwal bank, the British bank said in a statement. RBS also had an interest equivalent to a 15.3% stake in Alawwal bank.
RBS said that as a result of the merger completion, it would recognise an income gain on disposal of the Alawwal bank stake for shares received in Saudi British Bank of almost $503 million and a reduction in risk weighted assets of nearly $5 billion.
RBS also said the deal would extinguish legacy liabilities of almost $377.
The changes would increase the bank's CET1 core capital ratio by 60 basis points, it said.
The merger will also help RBS to focus on its target markets, RBS chief executive Ross McEwan said in a statement.
RBS, which was rescued in 2008 with a nearly $57 billion capital injection by the British government, has been shrinking its overseas operations since the financial crisis to focus on its UK lending operations.