* BMW move follows similar steps by rivals
* Analysts say will help both firms increase market share
* BMW expanding in China to diversify sales away from Europe
By Edward Taylor
FRANKFURT, June 23 BMW said on Monday
it had extended its joint venture with Brilliance China
Automotive Holdings until 2028, a move which analysts
say would help both companies continue expanding in the world's
largest car market.
BMW declined to comment about the details of the contract
extension between the two companies, or say whether this
entailed more ambitious expansion plans. Brilliance China
Automotive Holdings also declined to comment.
The Munich-based auto maker has been working with Brilliance
since 2003, and builds the X1 offroader as well as
long-wheelbase versions of its 3-series and 5-series cars in
plants run by BMW Brilliance Automotive in China.
"Having a strong partner and long-term visibility regarding
the relationship is very important in order to safeguard BMW's
position in China," analysts at ISI Group said in a note on
Despite a gentle easing in national economic growth in 2013,
China's auto sector grew 15.7 percent to 17.9 million passenger
vehicles, according to the China Association of Automobile
BMW is aiming for 2014 sales of 2 million or more, after it
delivered a record 1.96 million cars in 2013. Of the 1.96
million BMW and Mini cars sold in 2013, 20 percent were sold in
The German firm is expanding its China operations because it
wants to cut its dependency on the sluggish European market,
which last year accounted for 44 percent of group sales.
In China, BMW Group sold 390,713 Mini and BMW branded cars
in 2013, a 19.7 percent rise from the year earlier.
BMW has been broadening its footprint in China. Earlier in
June it placed yuan-denominated asset-backed securities, a move
which helps pay for expansion plans in local currency.
BMW's effort follows on from Daimler, which last
year restructured its joint venture with BAIC Motor as a way to
gain a tighter grip of its sales and distribution network in
European and U.S. manufacturers are eager to increase their
presence in China, but have been limited to owning 50 percent or
less of joint venture companies run together with Chinese
In addition to the ownership threshold, the current policy
calls for foreign automakers to set up a jointly-run technical
centre in China and to transfer certain technologies to their
(Additional reporting by Shen Yiming; Editing by Erica
Billingham and Keiron Henderson)