BMW may have hit Chinese regulatory wall in e-car plan

By Yilei Sun, Brenda Goh and Edward Taylor

China’s Great Wall Motor has said that its joint venture with BMW faced regulatory uncertainties as both companies pledged to proceed with plans for developing a low-cost electric car.

The stockmarket filing was made in response to media reports that the alliance was in trouble.

German newspaper Sueddeutsche Zeitung reported last weekend that the tie-up could fail, citing sources familiar with the matter.

Great Wall said in the statement: “At present, the project is proceeding as planned, and the two parties are communicating on the details of the co-operation and preparing for the project to seek approval from the relevant authorities.”

There are uncertainties regarding whether the joint venture will be able to obtain the required regulation approvals, it said.

BMW signed an agreement with Great Wall last year to build an electric version of the Mini. BMW said the joint venture was going very well in all work streams and significant progress was being made in all business areas.

Carmakers and suppliers are scrambling to meet tough new Chinese quotas for less polluting cars. Those rules call for electric and rechargeable hybrid vehicles to account for a fifth of total sales by 2025. Great Wall, which is China’s top sport utility vehicle and pick-up truck maker, currently builds Ora, a cheap battery electric vehicle brand in Baoding, the city where it is headquartered. The venture aims to build a plant in Zhangjiagang city with the capacity to build 160,000 petrol vehicles for export and another 160,000 new energy vehicles, documents on the city’s website show.

It will also have a research centre and car parts manufacturing facilities. A separate local government document shows investment in the project is forecast at €2.55bn. In February 2018, BMW said it had signed a letter of intent with Great Wall to produce a battery-electric vehicles for the Mini brand in China.

BMW chief executive Harald Krueger said last week the German carmaker can move more production of its Mini to a plant in the Netherlands if the UK fails to strike a trade deal with the EU.

BMW said contract manufacturer VDL Nedcar had produced 211,660 cars in the Netherlands last year, a 39% increase in production, assembling the BMW X1, the Mini hatch, Mini convertible, and Mini countryman models. By contrast, Oxford made 234,501 Mini vehicles last year. VDL employs about 6,000 workers working in car assembly, compared with just over 4,500 people building Minis in Oxford.

- Reuters