GERMANY’S BMW said it will take majority control of its main China joint venture for 3.6 billion euros (US$4.2 billion), the first such move by a global carmaker as China starts to relax ownership rules for the world’s biggest auto market.

BMW will lift its stake in its venture with Brilliance China Automotive Holdings Ltd. to 75 percent from 50 percent, with the deal closing in 2022 when rules capping foreign ownership for all auto ventures are lifted.

The move will likely spur BMW to shift more production to China, helping boost profits amid a whipsawing trade war between the United States and China that has raised the cost of BMW importing cars manufactured at its South Carolina plant.

The deal also marks a milestone for foreign carmakers which have been capped at owning 50 percent of any China venture and have had to share profits with their local partner.

“We are now embarking on a new era,” BMW chief executive Harald Kruger said in a speech in the northeastern Chinese city of Shenyang, where the joint venture is based.

China has been keen for global carmakers to invest more in the country, including easing restrictions that cap foreign ownership of electric vehicles businesses at 50 percent this year.

As trade tensions have escalated, China’s government has also pledged to open up its markets more widely, including cutting taxes on imported vehicles, cancer medicines and a range of consumer goods.

The country’s leaders have also played up other milestone deals such as German chemical maker BASF winning approval in July to build China’s first wholly foreign-owned chemicals complex.

The rule changes have already helped Tesla Inc. gain China’s approval for a wholly owned China manufacturing and sales company in Shanghai, marking the first time a foreign carmaker will be able to establish a full presence in China without a partner. (SD-Agencies)