BMW signed an agreement with Chinese Brilliance Auto according to which the German automaker will invest 100 million euro in the Asian country.
The agreement between BMW and Brilliance Auto was also signed by German Chancellor Angela Merkel and Chinese Premier Li Keqiang, who is in a 3-day visit to Germany. The investment will be aimed for the purchase of equipment needed for a manufacturing facility and also an economic research center located in China.
BMW and Brilliance Auto became partners in 2003, when the two automakers signed a deal which allowed Brilliance to run two BMW plants in China. Brilliance missed analysts’ full-year profit estimates as the sowing economy intensified competition. Brilliance China Automotive ‘s net income was up 27% to 2.3 billion yuan ($370 million), compared with analysts’ estimates of 2.36 billion yuan. Sales dropped 8.2% to 5.92 billion yuan.
“During the year 2012, China’s automobile sector continued to show mild growth,” Wu Xiao’an, Brilliance’s chairman, said in the statement. “The years 2013 and 2014 will remain challenging for this business, and it is likely that the minibus operation will bring negative financial impact to the Group’s overall performance during those periods.”