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Great Wall Motor, BMW form joint venture to produce new energy vehicles

Great Wall Motor, BMW form joint venture to produce new energy vehicles

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Great Wall Motor Company Lts (GWM) nad BMW Holding BV have entered into a joint venture in the global market

German premium car maker BMW AG (BMW.XE) said Tuesday that it will form a joint venture with China’s Great Wall Motor Co. Ltd. (2333.HK) to produce electric vehicles of its iconic Mini brand.

According to the agreement, BMW and Great Wall will each hold a 50% stake and contribute CNY850 million ($128.4 million) to the joint venture initially.

The new company, called Spotlight Automotive Limited, will also develop and produce electric vehicles for Great Wall, to be sold in China, BMW said.

BMW Chief Executive Harald Krueger said the joint-venture agreement would enable BMW to “contribute to China’s ambitious plans to ramp-up new energy vehicles and reduce emissions in the mobility sector.”

The deal is part of several agreements between German and Chinese companies signed this week, while Chinese Premier Li Keqiang and German Chancellor Angela Merkel meet in Berlin this week.

Both Merkel and Li have expressed their joint commitment to multilateral free trade rules during the visit, signaling their opposition to the trade policies of U.S. President Donald Trump.

Spotlight Automotive will be based in China’s Jiangsu Province, where a new production site will be set up, BMW said.

The deal follows a letter of intent signed by Great Wall and BMW to set up a joint venture in February. Investors had speculated about a possible partnership for a long time, occasionally sending shares higher.

On Monday, BMW also agreed to further expand its existing joint-venture with Chinese partner Brilliance Automotive Group Holdings.

Source: morningstar
Anand Gupta Editor - EQ Int'l Media Network

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