Every CEO has to come in front of his board of management from time to time to present how the company he’s running is going about its business. That includes Mr. Harald Krueger who did just that not long ago and had a couple of rather interesting things to say. Usually, these speeches offer insight into where a company is heading if you know how to read between the lines but the Q2 speech Mr. Kruger held this year was a bit different, blatantly emphasizing the role China will play in the company’s future development.
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After a number of German and EU companies have raised an alarm over what a trade war between the US and the rest of the world would mean, it looks like some trust issues have developed, with certain investors looking elsewhere for now. In his recent speech held in Munich, Mr. Kruger dedicated a huge chunk of his time to the ways BMW plans on growing and this time round, while the US was barely mentioned.
“As you know, the BMW Group remains committed to free trade and open markets. Our global presence enables us to remain agile and flexible. More than ever, we are looking at different scenarios and are taking advantage of opportunities in the major regions. China is our most important single market and leads the way in e-mobility and connectivity. In recent weeks, we’ve laid the path for important strategic steps. We will be expanding and strengthening our business in China over the long term,” BMW CEO Harald Kruger said.
In doing so, BMW is planning a couple of interesting ventures. For starters, the collaboration with Brilliance Auto will enter a new phase, as the plant they run together will be expanded to a capacity of 520,000 units. This is where some of the BMW X3 production is done and the Germans will start exporting the SUV from China to other markets in the near future. Furthermore, they completed negotiations with the Chinese government, allowing BMW to increase their stake in the joint venture starting with 2022, something a lot of people thought impossible to do. China regulations demand that investors team up with a local company in equal shares if they want to do business in the Asian country.
Not only BMW cars will be built in China but, as we previously reported, electric MINI models will also be built there thanks to a joint venture with Chinese manufacturer Great Wall Motor. In terms of technology development, BMW will gain a seat on the board of Apollo, Baidu’s open platform for automated driving. Baidu is one of China’s biggest technology companies, a sort of equivalent of Google if you will, and this move shows that there may be alternatives to US-based companies after all, if a trade war was to kick off.