BMW to Outsource China Mini Car Making to Great Wall

Updated on
  • Great Wall Motor, BMW discuss exporting Minis from China
  • Hong Kong-traded Great Wall shares suspended after 14% jump

Great Wall, BMW Said Working on Mini Car Deal

BMW AG is working on a deal that would bring manufacturing of the iconic Mini brand outside Europe for the first time, according to people with knowledge of the plan.

The German company is discussing a possible outsourcing agreement with China’s Great Wall Motor Co. to produce the small car for export, said the people, asking not to be identified as the deliberations are private. 

The British-designed vehicle, first built to tackle soaring fuel prices in the late 1950s, has evolved over the years and the vehicles are now produced in the U.K. and the Netherlands. After successfully reviving the brand -- selling more than 230,000 cars in the first eight months of the year -- BMW is now preparing to add an electric version for the first time.

Like its rivals, BMW is navigating a costly shift to making electric cars as governments around the world crack down on pollution and impose curbs on fossil fuels. In July, the Munich-based company chose Oxford, England, for the electric Mini, passing alternatives in Germany and the Netherlands. After China last month ordered most automakers to sell a minimum number of new-energy vehicles starting 2019, BMW said it is fully committed to promoting electric mobility in the country.

An agreement on local production of the Mini for exports would boost the prospects of Great Wall, whose shares surged 14 percent Wednesday following speculation of a joint venture with BMW. That prompted the Chinese maker to suspend trading the following day.

A spokesman for Great Wall declined to comment, saying the company will issue a statement later. Representatives for BMW in Germany declined to comment. Shanghai-listed shares of Great Wall have been suspended since late last month.

BMW already builds cars locally in a venture with Brilliance China Automotive Holdings Ltd. Sales of BMW and Mini cars in the Asian country rose 16 percent in the first eight months of the year to 383,976 units. China’s passenger-vehicle sales rose 3.3 percent to 2.34 million units last month, data showed Thursday.

The German manufacturer has outlined plans for at least 12 fully electric cars by 2025. Those include battery-powered variants of mainstream models like the X3 SUV as well as the futuristic, self-driving iNext. To help pay for the suite of new models, the company is expanding its top line of luxury vehicles as well as adding the full-size X7 sport utility vehicle.

BMW shares slipped 0.8 percent to 87.65 euros as of 10:39 a.m. in Frankfurt Thursday.

Great Wall, founded by billionaire Chairman Wei Jianjun, has become China’s leading SUV producer by offering consumers spacious models with a higher ride and at cheaper prices than sedans from foreign makers like Volkswagen AG and General Motors Co. It doesn’t have any carmaking partners in China.

Shares of the company have lagged behind rivals this year, with those of Geely Automobile Holdings Ltd., Brilliance China and Guangzhou Automobile Group Co. traded in Hong Kong all up more than 100 percent in 2017 to top a Bloomberg global gauge of automakers.

— With assistance by Ying Tian, Yan Zhang, and Elisabeth Behrmann

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