BMW’s joint venture for Mini in China in question

The joint venture Spotlight Automotive between BMW and Great Wall for the production of Mini electric vehicles in China may be in danger of failing. The strategic and cultural boundaries may prove too great, German media reports.

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In July 2018, BMW and Great Wall Motor signed an agreement for the production of Mini brand electric vehicles in China. Further details leaked this spring: With an eye on a new plant, Spotlight Automotive calculated with a production capacity of around 160,000 electric cars per year and an investment volume of 5.1 billion yuan (about 670 million euros). BMW and Great Wall will provide the joint venture itself with a capital of 1.7 billion yuan (around 220 million euros) for a start. This news can be traced back to a report referring to Great Wall manager Wang Fengying.

But now German media writes that the talks are deadlocked on fundamental issues – “some insiders in Munich even think a complete failure is possible”, writes journalist Max Hägler for the German newspaper, the Sueddeutsche Zeitung. Long planned journeys for BMW engineers to go to the new partner in China have been cancelled.

The report further assumes that because of the poor business figures, investments are examined more closely. Additionally, the upcoming change of management at BMW could play a role. In this environment, the frictional losses between culturally very different partners naturally carry more weight. Different views can lead to the project becoming significantly more expensive than planned. The demands placed on the common vehicle platform could also prove to be very different. According to the report, BMW does not want to deviate from its quality and safety standards, but Great Wall is aiming for cost-effective production above all else.

In Munich, there is talk of “disappointed expectations” and that “every month of delay is problematic”. What this means for Mini’s China plans can hardly be estimated at the moment. From 2021 at the latest, electric minis were to be produced there – the Rocketman even showed the potential for a second electric series.

Update 08.08.2019: In the meantime, Great Wall has commented on the problems at Spotlight Automotive: It is questionable whether the joint venture will obtain the necessary permits for the construction of the planned production facility. For the moment, however, existing plans are still being adhered to.

sueddeutsche.de (in German), reuters.com (update)