BMW will extend the contract term of its joint venture in China from 2018 to 2040 and make an additional investment of 3 billion euros for production capacity expansion, the German automaker and its Chinese partner Brilliance China Automotive Holdings announced on Thursday in Shenyang city, Liaoning province in north China.

A new plant will be built in Tiexi district of Shenyang and will produce fully electric, partly electric, and conventional vehicles on the same line, doubling the joint venture's current production capacity.

The existing plant in Dadong district will also be improved and equipped with a more flexible production system to cope with diversified market demands. From 2020, a fully electric model, BMW iX3, will be produced there to be sold globally.

In the following three to five years, the total annual production capacity of BMW automobiles at the plants will increase to 650,000 units, creating 5,000 new jobs.

China is BMW's single largest sales market, with 560,000 vehicles sold in the country last year.

The agreement makes BMW the first automaker to take advantage of China's policy to allow foreign companies majority control in joint ventures with local companies.

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