BMW’s Chinese collaboration could have repercussions for Midlands motor industry

BMW is advance talks with a Chinese manufacturer in a move which could have wide reaching significance for the Midlands motor industry.

The German manufacturer has revealed it is in advanced discussions to ramp up the global success of its MINI brand through a new joint venture in China.

BMW has signed a ‘letter of intent’ with Chinese manufacturer Great Wall Motor to produce a local version of an electric MINI.
In addition, production of the first battery electric MINI at the main plant in Oxford will start in 2019.

BMW said the move signalled a “clear commitment” to the electrified future of the MINI brand.

The announcement has potential implications for the Midlands as traditional engines for the MINI range are produced at the group’s Hams Hall factory, near Coleshill.

With concerns about the future of diesel engines in the UK, due to government rules on emissions then workers in the West Midlands may be looking over their shoulders about what the future may have in store for them.

BMW said its next step would be to agree on the details of a possible joint venture and cooperation agreement with its Chinese partner, and to clarify aspects such as the choice of production location and concrete investments.

The manufacturer said it had no plans to set up an additional sales organisation in China as the company was firmly committed to continuing its established sales structure.

Independently of its strategic considerations towards the MINI brand, BMW also plans to further expand its successful BMW Brilliance Automotive (BBA) joint venture in China with its partner, Brilliance.

In addition to its two automobile production locations, BBA already runs an engine plant, which includes a battery factory for electrified BMW brand vehicles produced locally in Shenyang. This is the first battery factory operated by a premium automobile manufacturer in China.

In recent years, BBA has become a cornerstone of the BMW brand’s success in its largest market and serves as a model for the continued development of MINI in China. Around 560,000 BMW brand vehicles were delivered to customers in China in 2017 – more than in the next two largest markets, the US and Germany combined.

In 2017, China was MINI’s fourth-largest market, with around 35,000 units delivered. BMW said this underlined the brand’s additional global potential.

In a statement, BMW said: “The successful strategy for expansion of the BMW Group’s global production network obeys a clear rule: Production follows the market.

“However, expansion of the BMW brand in its largest markets, such as China, has not led to a decrease in production at the company’s German plants. On the contrary, between 2007 and 2017, production in Germany increased by close to a quarter to around 1.15 million vehicles per year. At the same time, almost half of all BMW production now takes place at plants outside Germany.

“A similar growth strategy could accelerate development of the MINI brand significantly without questioning the BMW Group’s commitment in the UK.”

BMW is not the only German-owned manufacturer to be looking at a Chinese partner for its EV development programme.

Geely, which owns Volvo and the Ansty Park-based London Electric Vehicle Company – formerly London Taxi Company, has agreed a deal to become the biggest investor in Mercedes-Benz owner Daimler to order to co-operate on a new EV programme.

The agreement, which will it has raised concerns about Chinese access to European technology, underlines how important the Chinese market is to European carmakers.

Geely chairman Li Shufu has said he wants the partnership to thrive so that Daimler becomes a global leader in electro-mobility.