BMW To Outsource Mini Production To China's Great Wall

BMW To Outsource Mini Production To China's Great Wall

BMW To Outsource Mini Production To China's Great Wall

BMW AG (BMW.XE) plans to diversify partnerships to grow its Mini brand in China, the company said following reports that it was in talks with Chinese vehicle maker Great Wall Motor Co.

Great Wall is one of few Chinese carmakers without an worldwide carmaking partner.

According to Automotive News, quoting anonymous sources inside both companies, the BMW Group is negotiating with Great Wall with the aim of bringing MINI production to China.

Another person familiar with the matter said the new joint venture in the eastern city of Changshu would not deal with gasoline or diesel powered cars, indicating a focus on electric vehicles was likely. That strategy helped propel the company to a 26 percent sales surge a year ago.

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Such a move would also allow BMW to export cars from China which are considerably cheaper to make, once the Brexit takes place and trade tariffs between the United Kingdom and the European Union are introduced.

If the JV project moves ahead, it will be BMW's second partnership operation in China. But China's state planner has said that in principal it will not approve any new foreign joint ventures involving traditional gas-powered cars because the market is already oversupplied. Back then it didn't make a lot of sense because the German brand is already working with a different partner in China, Brilliance Automotive, as per the regulations of the Chinese government. The company said its shares will resume trading when markets open on Monday.

Subsequently, Hyundai was also linked as a buyer to Jeep brand.

Patrick Yuan, an analyst at Jefferies Hong Kong, said it is understandable that BMW needs a new partner to defend its market share in a more competitive market.

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