BMW Says China Approves Study For JV With Brilliance Auto

MUNICH March 14, 2003; Dow Jones reported that Bayerische Motoren Werke AG Friday said the Chinese government has approved a feasibility study for a joint venture with Brilliance China Automotive Holdings Ltd. , as expected.

The German luxury-car maker said it will invest a total EUR450 million in the production and distribution joint venture by 2005, and will hold a 50% stake.

Many of BMW's rivals, including DaimlerChrysler AG's Mercedes-Benz, are also now working on local deals meant to help them take part in the fast-growing Chinese auto market.

"The joint venture represents a fundamental step forward in one of the most important automobile markets of the future," said BMW Chairman Helmut Panke in a statement.

BMW expects the joint venture to start production in the second half of 2003. It is planning on yearly output of around 30,000 3-Series and 5-Series cars, with around 3,000 employees for the medium term.

The auto company reiterated it aims to hike annual sales in Asia to around 150,000 cars over the next five years, from 80,000 now. It sold 6,700 autos in China in 2002.

Growth in regions such as Asia have also helped offset a slump in western Europe in recent months.

The feasibility-study green light Friday completed what BMW considers the most important step in the approval procedure, it said. The last stage in the process will be getting a business license and approval of the joint venture contract.

BMW added that China's State Council had already approved the project proposal last June.