BMW’s Brilliance China partner considers selling JV stake, say sources

BEIJING: Brilliance China Automotive Holdings Ltd’s biggest shareholder is considering options to raise funds including selling the company’s 25% stake in its joint venture with BMW AG, according to people familiar with the matter.

Several Chinese carmakers including China FAW Group Co. have been involved in preliminary talks about the stake in BMW Brilliance Automotive Ltd., the people said, asking not to be identified because the deliberations are private.

Talks are ongoing, no final decision has been made and there may not be a transaction, the people said.
BMW Brilliance is Hong Kong-listed Brilliance China’s most valuable asset, essentially accounting for all of its net income.

BMW spent €3.6 billion (RM18.3bil) in 2022 to lift its stake in the joint venture to 75% from 50%.

Brilliance Auto restructuring

Brilliance China’s parent Brilliance auto Group Holdings Co. is undergoing a restructuring after defaulting on debt payments in 2020.

Regulators also fined the company millions of yuan for a range of violations, including fabrication of earnings reports.

A plan approved last year will see the government of Shenyang, the northeast Chinese city where the group is based, take over and repay Brilliance auto’s creditors 16.4 billion yuan (RM10.7bil) in installments.

Officials from the Shenyang government, which will have a 29.99% stake in Brilliance China when the restructuring is completed, said they weren’t aware of the potential sale of the joint venture holding.

Brilliance China and FAW representatives didn’t respond to requests for comment, while BMW declined to comment.

The joint venture

Established in 2003, the BMW Brilliance venture has two factories in Shenyang, a research and development center and a powertrain plant, making it BMW’s biggest producer.

The German automaker said Tuesday that its sales in China, the world’s biggest car market, rose 4.2% in 2023 to nearly 825,000 vehicles.

BMW Brilliance plans to invest 10 billion yuan(RM6.6bil) in a battery assembly plant and will also begin producing Neue Klasse electric vehicles in Shenyang from 2026, Bloomberg News reported in May.

The China venture currently makes seven model ranges - fully electric, plug-in hybrid and internal combustion engine vehicles - with annual production capacity of 830,000 units, according to BMW.
Autos BMW