Major automakers are relying on China to raise their sales and avoid going under due to the global financial crisis. In fact, BMW AG and its partner, Brilliance China Automotive Holdings Ltd., will invest $735 million to expand their production capacity, from an annual figure of 30,000 units to 75,000 units.
BMW said further in its statement that the total long-term investment by BMW Brilliance Automotive Ltd., the country's eighth-largest automaker, is estimated to eventually exceed 5 billion yuan.
With this investment, the partnership will be expanding an existing plant in the northeastern Chinese city of Shenyang that already produces the BMW 3- and 5-Series sedans.
BMW and Brilliance will have a second plant, which will begin construction in 2010. Qi Yumin, the chairman of Brilliance Group, said that this plant will have an annual production capacity of 100,000 units.
Speaking to reporters, Friedrich Eichiner, a board member of the BMW Group, said that China is a "global driver of growth in the automotive market." In addition, Eichiner says that China will play a major role in the development of future technologies.
Looking at the past year, it's clear that china had been the "bright spot" for the global car market largely due to government incentives, including huge cuts in sales taxes on small cars, which are set to expire by the end of the year.