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GWM and BMW put the Spotlight on new 50:50 JV

ZHANGJIAGANG, Jiangsu – The spotlight was in Zhangjiagang, Jiangsu Province today, literally and figuratively, as Great Wall Motor and BMW Group broke ground for their joint venture – Spotlight Automotive Co., Ltd.

The inauguration of BMW Group’s second JV in China comes a week after the JV officially received approval from the Jiangsu Provincial Development & Reform Commission.

A little over 16 months ago, the agreement for the blockbuster JV was signed on July 10, 2018 in Berlin during Chinese Premier Li Keqiang’s official State visit to Germany, in which a record 12 deals related to the auto industry were signed between the two countries. Then on August 13, 2018, the two partners officially signed a deal with the Zhangjiagang Municipal Government putting the future production site for the JV in the city about 150 km northwest of Shanghai.

Zhangjiagang was chosen as the location of the Spotlight plant because of its solid supplier network, skilled workforce and good infrastructure, BMW Group said in a statement on November 29. Jiangsu is also one of the leading provinces for finance, education and technology.

The two partners had signed a letter of intent on February 23, 2018 to create BMW Group’s second vehicle JV in China.

The 50:50 JV is expected to start construction in 2020 and start of production is scheduled for 2022. It has a total investment of ¥5.1 billion and registered capital of ¥1.7 billion. The state-of-the-art plant will have a standard annual capacity of 160,000 vehicles composed of traditional fuel passenger vehicles exclusively for export as well as battery electric passenger vehicle R&D and production. Construction is expected to take 24 months with the project taking up about 630,000 square meters including 274,657 square meters of floor space, with approximately 460 sets of production and testing equipment.

The traditional fuel PV production part of the project consists of stamping, welding, coating and general assembly lines as well as a proving ground, while the battery electric PV R&D and trial production part of the project consists of a technical center focused on developing a new generation of safe, environmentally friendly and smart EVs.

Worth noting is that the approval Great Wall Motor has received does not cover the production and sales of the battery electric PVs, which would require a separate approval process.

“Today we are taking the next step in our collaboration: With the BMW Group as a pioneer in the field of electromobility and Great Wall as a major player and expert in industrialization in the Chinese market, we are joining forces for development and production of the future electric MINI and new Great Wall models,” said Klaus Fröhlich, member of the Board of Management of BMW AG, responsible for Development.

Dr. Nicolas Peter, member of the Board of Management of BMW AG, responsible for Finance, stressed the strategic importance of the cooperation with the Chinese partner.

 “This German-Chinese relationship underscores our commitment to China and the future of premium compact electrified vehicles. This joint venture will enable us to produce a larger number of MINI-brand-fully electric vehicles at attractive conditions for the world market. This is also an important strategic step for the MINI brand. The joint venture with Great Wall underlines the enormous importance of the Chinese market for us,” he said.

“The Spotlight Automotive project will be one of the most high-quality, innovative and influential Chinese-foreign cooperative models in the history of the Chinese auto industry,” said Wei Jianjun, chairman of Great Wall Motor. “The joint venture will provide strong support for Great Wall Motor’s globalization strategy and is a combination of two strong partners. We will fulfil our promise along with BMW Group and the local government to push ahead the construction of the factory, its start of production and maintain healthy development.”

“Spotlight Automotive is a project that combines R&D, production, warehousing and logistics, with products sold globally,” said Zhao Guoqing, chairman of Spotlight Automotive and senior vice president of Great Wall Motor. “Building on the foundation of R&D capabilities resources of its parent companies and utilizing BMW Group’s global technology experience and operational expertise, Spotlight ushers in a new business model focused on joint R&D, Chinese manufacturing and global sales, achieving a truly win-win cooperation and put into full play advantages in resources, efficiency, technology and quality from the parent companies.”

Timeline of Spotlight Automotive formation:

* April 18, 2016: BMW Group and Great Wall Motor sign confidentiality agreement on talks to set up a JV;
* February 21, 2017: BMW Group and Great Wall Motor sign agreement over feasibility of cooperation on MINI brand;
* October 13, 2017: Great Wall Motor issues statement confirming previous agreements;
* February 23, 2018: BMW Group and Great Wall Motor sign letter of intent to create German automaker’s second JV in China;
* July 10, 2018: BMW Group and Great Wall Motor sign deal in Berlin during Chinese Premier Li Keqiang’s official State visit to form Spotlight Automotive JV;
* August 13, 2018: The two partners sign agreement with Zhangjiagang Municipal Government for the Spotlight Automotive project;
* November 21, 2019: Spotlight Automotive receives Jiangsu Provincial Development & Reform Commission approval;
* November 29, 2019: BMW Group and Great Wall Motor break ground for Spotlight Automotive.

Previously, the JV had expected to first produce a compact electric SUV under a new brand with a range of approximately 500 km starting in the first half of 2021, with MINI EVs to follow in 2022. The board of the JV will be composed of six members: the chairman will be appointed by Great Wall Motor and the vice chairman will be appointed by BMW Group. The term of board members will be for four years.

Wei told the media at a press conference on July 11, 2018 that NEV credits generated by the JV will be split between the partners. Future MINI electric vehicles produced at the JV will utilize BMW’s existing sales structure and channels, while the new brand will utilize Great Wall Motor’s existing channels.

This was again confirmed at the inauguration event on November 29: The joint venture will not be creating an additional sales organization in China for future electric vehicles. Every joint venture partner will use their own sales channel for their specific brands.

On October 13, 2017, Great Wall Motor confirmed in a statement that it had not signed any legal documents with BMW regarding the establishment of the JV but did sign a confidentiality agreement on April 18, 2016 regarding the development of EVs and traditional fuel vehicles and an agreement on February 21, 2017 over the feasibility of cooperation with the MINI brand.

BMW Group recently began production of the first battery electric MINI, the MINI ELECTRIC, at its main plant in Oxford and will launch the model to market in Q1 2020. The JV with Great Wall Motor will mean that China would become the second location globally to produce MINI EVs. MINI Plant Oxford, which recently built the 10 millionth car since the brand’s launch in 1959, will remain the heart and home of MINI manufacturing, while the Spotlight Automotive JV will provide additional capacity and flexibility.

BMW Group recently delivered its 50,000th new energy vehicle in China, about a 10th of 500,000 it will have delivered by the end of 2019. By the end of 2021, the company aims to have more than 1 million fully-electric vehicles and plug-in hybrids on the roads worldwide.

At that point, the BMW Group will offer five fully-electric production vehicles:

  • BMW i3, which saw demand increase by approximately 20 percent so far this year;
  • MINI ELECTRIC, which has so far received interests from over 78,000 customers;
  • BMW iX3, which will begin production in Shenyang;
  • BMW iNEXT, which will be built at the Dingolfing plant (Germany) in 2021;
  • BMW i4, due to go into series production at the Munich plant also in 2021.

By 2023, the company will already offer 25 electrified models – more than half of which will be fully electric. Flexible vehicle architectures, which allow a model to be driven fully electrically, as a plug-in hybrid or with a combustion engine, form the basis for this, as well as a highly flexible production system.

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