Economy

BMW considers Chinese joint venture with Great Wall

BMW considers Chinese joint venture with Great Wall”

BMW is mulling a second Chinese joint venture to increase production volumes and bolster its electric vehicle (EV) presence, Reuters reports. It is the country's second-largest premium brand after Volkswagen AG's (VOWG_p.DE) Audi AG.

Auto manufacturers have recently announced a raft of investments and tie-ups in China.

Tesla, Ford Motor Co, Daimler AG, and General Motors are among those that have already announced plans for making electric vehicles in China.

It is believed that the new venture would aim to increase both BMW's production volumes and its EV share, as China prepares to introduce strict quotas on the percentage of plug-in offerings sold by vehicle makers.

Cars produced under the BMW and Great Wall deal will be built in the city of Changshu in the east, and a source close to the subject said only EVs would be produced there.

Brilliance China Automotive Holdings, which makes cars in a venture with BMW, rebounded 4.9% at 10.01am in Hong Kong after falling 2.1% on Wednesday. Shares in Brilliance fell on Wednesday.

Trading will be suspended pending clarification of press articles, the company said in a statement. Representatives for BMW's China unit didn't immediately respond to an email seeking comments.

It's also reported that Great Wall recently secured a deal for supplies of lithium, a key mineral in the production of battery packs in electric vehicles. Local media speculation of a tie-up with BMW sent its shares soaring 14% Wednesday, prompting suspension in trading.

Great Wall's Shanghai shares have been suspended from trading since late last month.

Brokerage Jefferies said in a note that it was "understandable that BMW needs a new partner to defend its market share in a more competitive market", and expected that the move would hit current partner Brilliance.



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