German carmaker BMW AG said increasing its stake in its Chinese car-making joint venture will boost earnings by up to €8 billion ($9.1 billion), signaling to competitors that it is highly beneficial to take control of operations the world’s largest car market, reports Bloomberg.
Chinese authorities gave BMW permission to raise its stake in the business with Brilliance China Automotive Holdings Ltd. to 75% from 50%, the German company said Friday. The move will lead to a positive one-time effect of €7 billion to €8 billion for BMW’s main automotive segment.
BMW is one of the first Western automakers to benefit from the relaxing of China’s foreign ownership rules—a watershed moment for the industry. China is BMW’s biggest national market, accounting for about a third of global deliveries last year. Its venture there assembles BMW-branded models for sale locally and the all-electric iX3 sport utility vehicle for export to global markets.
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