Beijing — BMW is poised to become the first foreign car company to take majority control of its Chinese venture as the country opens up one of its biggest industries to foreign ownership despite a worsening trade war with the US

The second-biggest luxury car maker plans to unveil the new ownership structure of its venture with Brilliance China Automotive Holdings soon, according to a person familiar with the plan, who asked not to be identified because the accord remains confidential.

BMW is the biggest exporter of vehicles from the US to China, putting it among major companies most exposed to a trade war.

BMW holds a 50% stake in the partnership. Beijing in April said it would remove the foreign ownership cap with any changes coming into effect for passenger car ventures from 2022. Shares of Brilliance and BAIC Motor, a partner of Daimler, both declined on concerns foreign car makers gaining more control will mean they’ll miss out future profits. China is the biggest market for many brands, including Volkswagen, Audi, BMW and Daimler’s Mercedes-Benz.

China and Germany are forging closer ties with each other as trade relations worsen with the US.

BMW’s move highlights some of the paradoxes facing global companies as they look at the Chinese market. On the one hand, Beijing is carrying through on a pledge to open up its economy to more foreign ownership, a long-standing plea of foreign firms. On the other, companies such as BMW, mobile chipmaker Qualcomm and US soybean farmers are trying to negotiate an ever-widening range of tariffs as trade relations worsen between the two economic superpowers. For the car makers, it is creating pressure to shift towards more localised production.

BMW rose as much as 2.4%, and was up 0.8% to €79.51 at 2.13pm in local trading, valuing the company at €51.7bn.

China and Germany are forging closer ties with each other as trade relations worsen with the US.

BMW CEO Harald Krueger was in Berlin at the start of the week during a summit between Chinese Prime Minister Li Keqiang and German Chancellor Angela Merkel. Among discussions were opportunities to open up China more to foreign investment. As part of corporate deals signed at the meeting, chemicals company BASF agreed to invest as much as $10bn in a new factory in China that it would wholly own, also a first for that industry.

Volkswagen, the biggest foreign vehicle maker in China, also held talks with China’s premier in Berlin, resulting in an initial agreement with partner FAW Group to advance electric vehicles.

BMW declined to comment on the state of its discussions. Brilliance, which now owns 40.5% of the venture, did not immediately return a call and e-mail seeking comment. The German company is set to boost its stake in the venture to at least 75%, Manager Magazin reported earlier. Daimler said it was happy with its partnerships in China and was following the regulatory developments closely.