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Last Updated:  Thursday, 27 March, 2003, 10:42 GMT
BMW signs China deal
Car workers in China making cars for Western firms
China's appetite for cars is growing fast
German car firm BMW has finally agreed a long-awaited deal with China's biggest van maker to produce luxury cars for the Chinese market.

Brilliance China and BMW are between them putting 450m euros ($483m; 307m) into the 50-50 joint venture, which they said should produce about 30,000 3 Series and 5 Series BMWs a year.

The signing ceremony to seal the partnership, in Beijing's Great Hall of the People, brought years of talks between the two companies to a conclusion.

China's car market is growing rapidly, with sales up 60% last year to 1.2 million cars to become the fourth biggest market worldwide.

On the run

One reason for the elongated courtship is that Brilliance, one of a handful of Chinese companies whose shares are listed in both New York and Hong Kong, has had its share of legal troubles.

Its founder and ex-chairman, Yang Rong, is thought to have fled China for the US in 2002, just as the authorities sought to arrest him.

Listed in the Chinese media as the country's third richest man, Mr Yang has said he fears arrest after disputes with the government over the ownership of Brilliance, after almost 40% of the company was sold to the Liaoning provincial government at a discount of more than 90%.

But official statements say he is accused of tax evasion.

Rush to China

BMW, already a strong Asian presence thanks to operations in Malaysia, Vietnam, the Philippines, Indonesia and Thailand, is only the latest in a long line of Western carmakers to try to sell to China's car-hungry customers.

Audi, a unit of German rival Volkswagen, is already selling 35,000 cars a year built through its own joint venture with First Auto Works, which holds China's number one position in passenger cars.

US vendors GM and Ford are other recent arrivals.

Chinese trade rules will only allow Western manufacturers to build in China via joint ventures, although its membership of the World Trade Organisation could mean easier market access in the future.

Strong sales lift BMW profits
06 Nov 02  |  Business
BMW's uncertain future
30 Sep 02  |  Business
China tie-up for MG Rover
21 Mar 02  |  England

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