Beijing, Oct 11 (IANS): German automobile manufacturer BMW is set to acquire majority stake in its joint venture in China, BMW Brilliance Automotive, by spending $4.2 billion, according to a statement by the group on Thursday.

For the first time ever, Beijing is all set to lift restrictions in the Chinese automobile sector, allowing BMW to increase its stake from 50 per cent to 75 per cent in the joint venture, Efe news reported.

"The company has signed an agreement with its joint venture partner, a subsidiary wholly owned by Brilliance China Automotive Holdings Ltd. (CBA), to acquire an additional 25 per cent shareholding," said the statement.

BMW Group has sought to "further strengthen its long-term cooperation with CBA, increase production capacity at the existing sites" in China.

BMW will invest more than $3 billion in its manufacturing sites in the northeastern city of Shenyang and "expand the localization of additional models including 'new energy vehicles'".

The agreement will conclude in 2022, the year from which foreign manufacturers will no longer need joint ventures to operate in the country, the report said.

This year, China will eliminate the 50 per cent cap on ownership for firms selling specialized vehicles and electric and hybrid cars.

In 2020, this measure will also be extended to commercial vehicles and in 2022 to passenger vehicles.