BMW and Great Wall Motor entered into a joint venture worth $ 716 million for building a production facility in China on November 29, 2019.
The facility will be operations from 2022 and manufacture BMW’s MINI model electric cars as well as some models of the Great Wall Motor. This Zhangjiagang-based facility is likely to produce 160,000 cars per year with the support of 3,000 employees.
According to the BMW Group, today’s inauguration of the 50:50 joint venture between the two companies is a great achievement and would benefit both the companies.
China A Global Destination for Overseas Expansion
China has recently become a global destination for overseas investments for the production of electrical cars.
Automobile manufacturing companies including Tesla and Volkswagen had already started building their production facilities in the country.
Volkswagen is building two production facilities in China to start the production of electric cars in 2020. These units have a combined capacity of producing 600,000 vehicles in a year.
With this expansion and overseas investments in China, the sale of electric cars is expected to increase five times the current total sales of 2019 by 2025.
Expansion of BMW and Great Wall Motors
Great Wall Motors, a Chinese automobile company, manufacturers sport utility vehicles and pick-up trucks.
It received approval from the Chinese Government for the new facility in November 2019. The company also produces battery-run vehicles under the brand name called ‘Ora’.
The Germany-based luxury automobile manufacturer, BMW, has already announced the first production of its electric cars, MINI E model, in Oxford, England.
The BMW Group stated that the MINI E models would be available in the market in early 2020. Expansion of the production facility in China is a new business strategy for BMW amid the slowing down of the global economy and the potential US-China trade deal.
Nicolas Peter, a BMW board member, commented that the joint venture, which is known as Spotlight Automotive Limited, is “the enormous importance of the Chinese market for us”.
Considering the increasing demand for newly launched BMW i3 electric cars, the company plans to expand its production to more than one million electric cars by the end of 2021.
According to the BMW Group, the joint venture with Great Wall Motor is a win-win situation for both the companies.
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