BMW may form EV joint venture with Great Wall

BMW already has a joint venture in China with local carmaker Brilliance China Automotive Holdings, and produces cars at two plants in Shenyang.

BMW is eyeing a possible joint venture in China with domestic carmaker Great Wall Motors, to exclusively produce electric vehicles (EV). If formed, this will be the German company’s second Chinese alliance.

Authorities in China are keen on making electric and hybrid cars contribute at least a fifth of the country's automotive sales by 2025. China is also loosening its joint venture regulations in order to make this target more realistic.

With EVs getting such a massive push, and China being the world’s biggest automotive market as such, it’s understandable why BMW is keen on tapping into this market. BMW's China sales grew 11.3 per cent in 2016. It is the country's second-largest premium brand after Audi.

"We are in discussions with Great Wall about setting up a joint venture to produce cars in Changshu. I don't know how far along we have gone nailing this deal," said a BMW executive to Reuters, who prefered to remain anonymous.

BMW and Mercedes believe that they can mass produce new EVs based on conventional vehicle design, defying sceptics who say they will need more radical plans to head off the threat from new players like Tesla.

Contrary to the rumour, a spokesman for BMW, declining to comment on any new joint venture, said, "Our business development with the joint venture BMW Brilliance Automotive will continue as planned, and we will carry on to invest and develop our joint venture."

Nonetheless, Great Wall’s Hong Kong listed shares leapt 20 per cent on the news.

Source: Reuters