BMW Considering Joint Electric Vehicle Venture in China

Matt Posky
by Matt Posky
bmw considering joint electric vehicle venture in china

German luxury automaker BMW is seeking to establish a joint venture with China’s Great Wall Motor. The prospective deal focuses specifically on electric vehicles, according to sources familiar with the matter. A cooperative relationship with Great Wall would be BMW’s second in the world’s largest auto market – and a necessary one, as China forces all foreign automakers to team up with local partners in order to do business within the country.

Great Wall Motor Co. is China’s largest SUV maker by volume, and witnessed a nearly 20-percent rise in its share price on Wednesday after Asian media outlets reported it was in talks to partner with BMW.

Reported by Reuters, Bernstein analysts said that, given China’s aggressive push toward electrification and BMW’s pre-existing internal combustion sales, it’s believed any new venture would have to sell exclusively electric vehicles. It wouldn’t make much sense to bring in another gas-burning brand. Instead, experts claim BMW will sell EVs under the Mini badge.

“If an agreement were to be reached, we’d expect an arrangement like Denza (Mercedes-BYD), or VW-JAC, Ford-Zotye to be the most plausible outcome, whereby a new brand is used to sell EVs,” the analysts elaborated.

BMW already has a foot in the door with China. Working with Brilliance China Automotive Holdings, the German brand has two facilities in the Shenyang province already. A spokesman for the company confirmed it will continue working with Brilliance but was unwilling to discuss any plans with Great Wall.

However, an unnamed BMW executive already spilled the beans, saying, “We are in discussions with Great Wall about setting up a joint venture to produce cars in Changshu.”

BMW’s China sales grew 11.3 percent last year and it is currently the country’s second-largest premium brand. It’s currently trying to compete with Mercedes-Benz, which sells fewer vehicles overall but achieved 26.6 percent sales growth in China in 2016 — narrowing the gap. But BMW also wants mainstream success and EVs will play a major role in that.

The country wants electric and hybrid cars to comprise over one-fifth of its total auto sales by 2025. It’s so serious about this that it’s even considering loosening regulations on foreign automakers to achieve this goal. As a result, Tesla, General Motors, Ford Motor Co., and Daimler AG have all announced plans to build EVs in China.

“I don’t know how far along we have gone nailing this deal,” the BMW executive said. But Great Wall has already purchased a glut of lithium so that it can produce the batteries necessary to power upcoming models. It might not deal with BMW specifically but it’s clearly gearing up for battery-electric vehicles.

[Image: BMW]

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  • Threeer Threeer on Oct 12, 2017

    By "forces" you also mean "give up all technological know-how." For a country that stands in front of the world's stage and has its leader lecture everybody else on free trade, they're not quick to actually practice it in their own country. And if you don't comply and attempt to actually sell something in China made in another country, prepare for steep tariffs. GBMW-> Great Bayerische Motor Wall...doesn't quite roll off the tongue...

  • Wjtinfwb I'll certainly admit to a bit of nostalgia that drives my appreciation for these 70's yachts, but there's more to it than that. It was an era that the Big 3 ruled the luxury market with the German's and British nothing but a beer fart in the marketplace. That changed drastically as the early '80s crept in but in 1977, a Mark V or Seville was where it was at. No rose colored glasses, they were not great cars, what they were was a great living room that you could ride to the office in. I grew up on a diet of Cadillac's, Lincoln and one big Chrysler before dad made the move to a 280SE in about '77. Impeccably built and very road worthy, dad initially didn't like the firm seats, clunky automatic transmission and very weak A/C. The exorbitant maintenance costs didn't help. But he enjoyed the driving characteristics enough to get another Benz, then a 733i, an Audi 5000S and a Jag XJ6. Compare these to today's Cadillac's (non- V) and Lincoln's that with the exception of the Escalade and Navigator, are boring and probably even more pedestrian than the Eldorado, Seville and Mark's were.
  • FreedMike I was lucky enough to grow up in a household with the two best German luxury sedans of the time - a manual '81 733i, and a '75 Mercedes 450SE. The BMW was a joy on back roads, and the Benz was a superb highway car. Good times. And both were dramatically better than the junkheap American luxury cars Dad had before.
  • Wjtinfwb A Celebrity Diesel... that is a unicorn. Those early A-bodies were much maligned and I'm sure the diesel didn't help that, but they developed into very decent and reliable transportation. Hopefully this oil-burner Chevy can do the same, it's worth keeping.
  • Wjtinfwb After S-classes crested the 40k mark in the early '80s, my dad moved from M-B to a BMW 733i Automatic. Anthracite gray over red leather, it was a spectacular driving car and insanely comfortable and reassuring on long interstate hauls. My mom, not really a car person, used the BMW to shuttle her elderly Mom back home to Pennsylvania from Miami. Mom and grandma both gushed with praise for the big BMW, stating she could have driven straight through the car was so comfortable and confidence inspiring. A truly great car that improved through the E38 generation, at which point the drugs apparently took hold of BMW styling and engineering and they went completely off the rails. The newest 7 series is a 100k abomination.
  • Vatchy If you want to talk about global warming, you might start here: https://en.wikipedia.org/wiki/Darvaza_gas_crater
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