BMW might spin off Mini making

BMW AG is working on a deal to outsource the manufacturing of Mini cars in China to Great Wall Motor Co, the country's biggest SUV maker, according to people with knowledge of the plan.

The two companies are discussing the possible export of Mini brand cars from China to other markets, said the officials, who asked not to be identified because the deliberations are private.

A spokesman for Great Wall declined to comment, saying the company will issue a formal statement later. Representatives at BMW's China unit were not commenting at press time. The German carmaker now has a joint venture with Brilliance China Automotive Holding, with the contract to expire by 2028.

Patrick Yuan, an analyst at Jefferies Hong Kong, said it is understandable that BMW needs a new partner to defend its market share in a more competitive market. "Brilliance has been long criticized as a pure financial investor in BMW-Brilliance JV without significant contribution to BMW's success in China."

Great Wall is one of few Chinese carmakers without an international carmaking partner.

John Zeng, managing director of LMC Automotive Shanghai, said the possible partnership might be dedicated to electric Mini cars.

"China has made it clear that basically it will not approve of new gasoline-car partnerships. But producing electric cars will help BMW to meet its quota now that China demands every carmaker in the country ... produce a certain number of such cars starting from 2019."

Great Wall has become the nation's leading SUV maker by offering local consumers spacious models with a higher ride and at cheaper prices than sedans made by foreign makers such as Volkswagen AG and General Motors Co. That strategy helped propel the company to a 26 percent sales surge last year.

Bloomberg-China Daily