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Abu Dhabi, UAEThursday 19 July 2018

BMW's electric Minis to be built in China as German firms sign raft of deals

Expansion is the German luxury car maker’s second this week in China

Great Wall Motor will partner BMW to produce electric Minis in China. AP
Great Wall Motor will partner BMW to produce electric Minis in China. AP

BMW will make Mini cars in China for the first time, sealing a joint-venture agreement to produce electric vehicles with partner Great Wall Motor in the world’s largest automotive market.

The deal is one of several signed by German companies with Chinese partners, which Reuters said were worth some $23.51 billion, during a visit by Chinese Prime Minister Li Keqiang to Germany on Monday and Tuesday.

The BMW 50-50 owned venture will make battery-powered vehicles for both partners at a new plant in Jiangsu Province, BMW said on Tuesday, according to AP. The expansion is the German luxury car maker’s second this week in China, part of a parade of accords announced at a Berlin summit with Chancellor Angela Merkel and Chinese Premier Li Keqiang in attendance.

“Today’s signing represents a new level of cooperation between China and Germany,” said BMW chief executive Harald Krueger.

Creation of the venture, called Spotlight Automotive, coincides with China’s April decision to ease foreign-ownership restrictions in the country, with the possibility that western car makers could eventually buy out their local partners. On Monday, BMW agreed to lift output at a separate venture with Brilliance China Automotive Holdings that will lessen the sting of higher Chinese import tariffs on its US-made 4x4s.

The company sold 560,000 BMW brand vehicles to customers in China in 2017, more than the US and Germany combined. China was Mini’s fourth-largest market, with around 35,000 units delivered, it said.

“This underlines the brand’s additional global potential, which will now be significantly supported through the joint venture with Great Wall Motor,” BMW said.

The company pledged last year to build electric models at its factory in Oxford, England. It said Tuesday that any plans to expand in China don’t affect the brand’s commitment to Britain.

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Founded by billionaire Chairman Wei Jianjun, Great Wall has become China’s leading 4x4 producer by offering consumers spacious models at prices cheaper than saloons from the likes of Volkswagen and General Motors.

The news came as survey of investor confidence in the German economy has fallen to its lowest level since August 2012 on fears of an international trade war.

The ZEW index fell to minus 24.7 points in July, from minus 16.1 points in June.

The ZEW institute's head, Achim Wambach, said Tuesday that fears about a trade war with the United States outweighed positive news about employment and industrial production.

US President Donald Trump has imposed tariffs on steel and aluminium imports, including from the European Union, and on a range of Chinese goods. China and the EU retaliated with new tariffs, or import taxes, of their own. Germany's economy is heavily dependent on global trade, with exports 47 per cent of gross domestic product.

Other agreements signed this week between German firms and Chinese entities, Reuters reported, include:

BASF

BASF signed a Memorandum of Understanding (MoU) with China's Guangdong Province to look at building a highly integrated chemical production site there, BASF said.

The site would be BASF's largest investment and would be operated under its sole responsibility, it said. The investment is estimated to reach up to $10 billion by completion of the project around 2030, it added.

Bosch

Bosch and Chinese electric vehicle startup NIO agreed to cooperate on sensor technology, automated driving, electric motor controls and intelligent transport systems.

Continental

Chinese ride-sharing company Didi Chuxing said it signed an agreement with Continental to jointly develop connected vehicles and design purpose-built electric vehicles (EVs) for Didi's services.

Daimler

Daimler and Tsinghua University have signed an agreement to extend their cooperation on sustainable transportation research in China by three years.

Siemens

Siemens agreed with Alibaba to use the Chinese company's cloud infrastructure to roll out its digital operating system MindSphere.

Siemens and China's State Power Investment Corporation (SPIC) signed an MoU confirming their intention to collaborate on heavy-duty gas turbines.

Volkswagen

Volkswagen said its Spanish brand SEAT would return to the Chinese market in 2020/21 as part of an agreement with China's Anhui Jianghuai Automobile Group (JAC) to develop electric vehicles.

Premium brand Audi signed an MoU for strategic cooperation on connected vehicle technology.

VW also signed an MoU for a strategic cooperation with FAW on mobility, connectivity and new energy vehicles, according to a German government document.

The document also showed that it signed a framework agreement for strategic cooperation with China Automotive (Beijing) Intelligent & Connected Vehicles Research Institute on technology development for intelligent connected vehicles.