Brilliance China to expand BMW production with second factory

PUBLISHED : Thursday, 06 March, 2008, 12:00am
UPDATED : Friday, 08 May, 2015, 9:57am

Brilliance China Automotive Holdings will further boost production of BMW cars by building a second manufacturing plant in Liaoning province with an annual capacity of 100,000 vehicles in the third quarter, according to its top executive.

Chairman Wu Xiaoan disclosed the expansion plan yesterday after revealing that Brilliance had sold 32,000 BMW cars last year, a 58 per cent jump from 2006.

Mr Wu also said it was time to break the silence on the new project after the company had completed a difficult turnaround during the past few years.

The carmaker has been sputtering since its founder Yang Rong fled to the United States amid accusations that six years ago he committed economic crimes, charges which he has denied.

'It is expected that sales of BMW will grow 20 per cent this year,' Mr Wu said. 'The new manufacturing plant is regarded as the second phase of expansion and probably will be in Shenyang, Liaoning province.'

The plant will be owned by Brilliance China and BMW, each holding 50 per cent. Mr Wu did not disclose how much money would be invested in the plant, though he said the figure would be announced later this year.

The first phase of the BMW expansion is progressing. BMW's sales and marketing chief, Stefan Krause, said last month in Tokyo that the company would work with Brilliance China in the next few months to raise production capacity 45 per cent to as many as 44,000 cars a year.

Besides manufacturing BMWs, Brilliance China also makes its own brand of cars - the Zhonghua car and Jinbei Granse minibus.

The company sold 115,000 Zhonghuas last year and expects growth of 19 per cent this year. It sold 78,000 Jinbei Granses last year and expects a 12.8 per cent increase in sales this year.

Hong Kong-listed Brilliance China, which has seen two consecutive years of losses, expects to post a profit for last year, thanks to increasing domestic demand and tax breaks earned by using local suppliers.

Brilliance China sold 225,000 vehicles last year, up 84 per cent from 2006. The company expects overall sales growth of 15 per cent to 20 per cent this year.

'In addition to that, we pay 15 percentage points less tariff because the BMWs are 40 per cent localised now, which is in line with the central government's policy,' Mr Wu said.