BEIJING – BAIC Motor, the Hong Kong-listed subsidiary of BAIC Group, said in a statement on March 26 that it and partner Daimler AG will inject $892.84 million in further capital into their joint venture, Beijing-Benz Automotive Co., Ltd. (BBAC).
Upon completion of the capital increase, the registered capital of BBAC will be increased to $3.21 billion, with BAIC Motor, Daimler and Daimler Greater China (a wholly-owned subsidiary of Daimler) maintaining their respective equity shares of 51, 38.665 and 10.335 percent in BBAC.
The capital injection will be used to push forward the M254 engine technical upgrading project, the Mercedes-Benz C-Class (Model V206) generation upgrading project and the manufacturing upgrading and transformation project of the Beijing Branch of BAIC Motor, which was acquired by BBAC in February 2018 at about ¥5.84 billion to expand production capacity, including production of new energy vehicles.
The EQC will commence production later this year at a new premium production facility with a total investment of ¥11.9 billion based on the Beijing Branch, and launch to the local market by the end of this year. The locally produced EQC will debut at the Shanghai Auto Show later this month.
BAIC Motor said in the statement that the reasons for the capital injection in BBAC included improving competitiveness of auxiliary products of vehicles, obtaining market trend and achieving sustainable development. The upgraded Model V206 of the C-Class is expected to promote its market competitiveness and maintain its competitive edge. BAIC Motor also expects the capital increase will facilitate the further expansion of BBAC and maximize the interests of its shareholders while securing return on investment.
In 2018, BBAC sold about 485,000 vehicles, up 14.8 percent and contributing to over 70 percent of total Mercedes-Benz vehicle sales in China. The JV achieved cumulative production of 2 million vehicles and engines in 2018, just two years after vehicle and engine output exceeded one million units.
According to 2018 annual financial results released by BAIC Motor on March 27, BBAC had sales revenues of ¥135.4 billion and gross profit of ¥40.5 billion, compared to revenues of just ¥16.6 billion and gross loss of ¥3.5 billion for BAIC Motor’s Beijing Brand.
Total revenues of BAIC Motor in 2018 increased 13.2 percent to ¥151.9 billion, mainly attributable to the increase in revenues from BBAC, while net profit attributable to shareholders of the company nearly doubled to ¥4.4billion, with earnings per share up 83.3 percent to ¥0.55.