BMW, Great Wall Considering Electric Mini JV in China

BMW Group has signed a letter of intent with China’s Great Wall Motor Co. to jointly produce battery-powered Mini vehicles in China, as the German carmaker seeks to expand its electric car business in the world’s largest automobile market.

The planned joint venture with Great Wall represents BMW’s first Mini assembly site outside Europe.

“Next steps will be to agree on the details of a possible joint venture and cooperation agreement and clarify aspects such as the choice of production location and concrete investments,” the German company said in a Friday statement.

Great Wall said in a separate statement that the letter of intent is not legally binding and partnership details such as investment size and business model are still under discussion. The Chinese company said it would be the majority shareholder of the new venture.

Great Wall first revealed the prospect of this partnership with BMW in October.

China is BMW’s largest market with sales of nearly 600,000 vehicles last year, an increase of 15% from the previous year. This included 35,000 Mini vehicles, representing just under 10% of the 372,000 sold globally, according to the company.

BMW already has a joint venture in China, established in 2003, with Shenyang-based Brilliance Auto. The venture, BMW Brilliance Automotive, operates two automobile production sites and an engine plant, which includes a battery factory for locally produced electric BMW vehicles.

BMW said on Friday that it would further expand its manufacturing venture with Brilliance and it has no plans to set up an additional sales network in China.

Global carmakers have geared up efforts to tap China’s electric car market, the world’s largest, amid Beijing’s push for new energy vehicles in its bid to reduce pollution. Last year, Volkswagen announced a partnership with Anhui Jianghuai Automobile to develop and produce electric vehicles. Ford Motor and China's Zotye Automobile have also agreed to set up a 50-50 joint venture to build electric passenger vehicles.

Contact reporter Han Wei (weihan@caixin.com)