BMW, China’s Great Wall Negotiating Joint Venture

BMW is getting ready to build battery-electric Mini vehicles in China.

The German automaker says it is in talks for a new joint venture in China and has signed a letter of intent with Great Wall Motor.

“In addition to production of the first battery-electric Mini at the main plant in Oxford (U.K.) starting in 2019, this signals a further clear commitment to the electrified future of the Mini brand,” BMW says in a statement.

For BMW, the next steps will be to agree on the details of a possible JV and cooperation agreement and to clarify issues such as the production location and concrete investments.

The automaker has no plans to set up an additional sales organization in China, saying it is committed to maintaining successful cooperation with the established sales structure.

Independently of its moves with Mini, BMW says it will further expand its successful BMW Brilliance Automotive (BBA) joint venture in China.

Along with two vehicle-assembly plants BBA runs an engine plant, which includes a battery factory for electrified BMW-brand vehicles produced in Shenyang. It is the first battery factory operated by a premium automaker in China.

BBA has become a cornerstone of the BMW brand’s success in its largest market and serves as a model for the continued development of Mini in China. About 560,000 BMW-brand vehicles were sold in China last year – more than in its next two largest markets, the U.S. and Germany, combined.

China was Mini’s fourth-largest market last year with sales of about 35,000 units, underlining what BMW calls the brand’s additional global potential.

“The successful strategy for expansion of the BMW Group’s global production network obeys a clear rule – production follows the market,” BMW says.

Expansion of the BMW brand in its largest markets, such as China, has not curtailed production at the automaker’s German plants. Between 2007 and 2017, production in Germany rose almost 25% to about 1.15 million units a year. Almost half of all BMWs now are built outside Germany.

“A similar growth strategy could accelerate development of the Mini brand significantly without questioning the BMW Group’s commitment in the U.K.,” BMW says. “The company has made significant investments over the years to step up its involvement in the country.”