BMW bet on China with a contract that runs to 2040.
In October 2018 BMW moved to take 75% of its China venture and extended the contract to 2040. China hit 32.3% of deliveries in 2023, then slid to 29.2% in 2024.
Transcript
October 2018. BMW can become the first foreign carmaker allowed to take majority control of a venture in China. Would you sign?
Option one: raise its stake from 50% to 75%, pledge more than €3 billion in new plant structures, and push the contract out to 2040. Option two: keep the shared ownership. BMW took control, for cars made where they were sold, priced for the market, and politically welcome.
The deal only became legally effective on February 11, 2022, when the BMW venture received a new business license.
By 2023 it looked vindicated. China was BMW's largest market, at 32.3% of group deliveries, with 824,932 BMW and MINI vehicles sold.
Then in 2024, BMW's China deliveries fell about 14%, to roughly 715,200. China's share slid to 29.2%. BMW's net profit fell 36.9%, to €7.68 billion, a decline with two compounding causes, not one.
One bad year does not make a 2040 contract a mistake. But a deal that long will live through markets you cannot see yet. Before you sign, write down what you will do in the down years.
The records behind this video
Every figure in the video comes from this Decision Record, each with its sources.
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