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Autonews
SHENYANG -- BMW said it will take majority control of its main China joint venture for 3.6 billion euros ($4.2 billion), the first such move by a global automaker as Beijing starts to relax ownership rules for the world's biggest auto market.
BMW will lift its stake in its venture with Brilliance China Automotive Holdings to 75 percent from 50 percent, with the deal closing in 2022 when rules capping foreign ownership for all auto ventures are lifted.
The move will likely spur BMW to shift more production to China, helping boost profits amid a whipsawing trade war between Washington and Beijing that has raised the cost of BMW importing cars manufactured at its South Carolina plant.
The deal also marks a milestone for foreign automakers which have been capped at owning 50 percent of any China venture and have had to share profits with their local partner.
"We are now embarking on a new era," BMW CEO Harald Krueger said in a speech in the northeast Chinese city of Shenyang where the joint venture is based. He thanked Chinese Premier Li Keqiang who he said had "personally supported" the plan.
Beijing has been keen for global automakers to invest more in China, including easing restrictions that cap foreign ownership of electric vehicles businesses at 50 percent this year.
As trade tensions have escalated, China's government has also pledged to open up its markets more widely, including cutting taxes on imported vehicles, cancer medicines and a range of consumer goods.
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