The Business Times

BMW's China joint venture to start production in 2023

Published Tue, Apr 20, 2021 · 05:50 AM

Beijing

BMW AG's China joint-venture with Great Wall Motor Co is set to start production in 2023, as the German carmaker aims to have electric vehicles (EVs) make up one-quarter of its sales in the country.

The construction of a manufacturing plant with Great Wall is "well under way" and the main structure should be completed later this year, BMW's China chief executive officer Jochen Goller said in an interview at the Shanghai Auto Show on Monday. Production of two Mini EVs for the China and global markets will start in 2023, he said.

China is already the world's biggest electric vehicle market, and traditional carmakers such as BMW and Volkswagen AG are battling with a slew of upstarts as well as tech giants like Huawei Technologies Co plus more random entrants such as property developer China Evergrande Group for a slice of the market. The first day of the Shanghai Auto show was dominated by EV reveals, with Toyota Motor Corp unveiling its first SUV built on an electric platform.

Highlighting the opportunities - and challenges - of China's burgeoning EV market, BMW was the only traditional carmaker in its hall at the Shanghai show, a multi-day event aimed at highlighting the industry's latest innovations. BMW was surrounded by Nio Inc and Xpeng Inc (which unveiled a flying car); Zeekr, the new luxury EV brand from Zhejiang Geely Holding Group Co; tech giant Huawei, and China Evergrande New Energy Vehicle Group Ltd, which has designs on toppling Tesla Inc but has yet to produce a single car.

Despite the intensifying competition, Mr Goller said he remains optimistic about the long-term outlook for China's car market. With the growth of an affluent middle-class, China's car market will "continuously boom", he said in the interview.

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The German carmaker is off to a strong start, with 229,000 BMWs and Minis delivered in China in the first quarter, Mr Goller said. That's after sales rose 8 per cent last year. China's first-quarter retail auto sales surged 69 per cent from a year earlier, when the country was in the grip of coronavirus lockdowns.

While rival Daimler AG has decided to make its small-car brand Smart a China-only marque, that won't be the case with Mini, Mr Goller said. "Mini will always be a global brand for the global market." In other comments, he noted that: Covid-19 provided a "perfect storm" for shortages, as the global auto industry grapples with an undersupply of chips. The solution for BMW is to shore up long-term supply contracts.

BMW isn't abandoning the local dealer model, but will increasingly "offer the customer the opportunity to transact online". BLOOMBERG

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