Automaker wants to bring China Mini to the US market

At the end of 2019, BMW agreed on a joint venture with Great Wall, which aims to set up joint production of electric cars. The first cars are expected to roll off the production line in Jiangsu province as early as next year, with BMW Mini and Great Wall’s small car brand, Ora Cat, accounting for half each. New models are being built in China: in addition to a new basic version of the Mini in July 2023, a small electric SUV called “Aceman” will be available a year later.

Technically, both brands will be very closely related – the Chinese technology should even dominate. BMW wants to largely take over the electrical architecture from Great Wall. The technology developed for the Ora Cat is very competitive in terms of “range, loading capacity and, above all, costs,” says a BMW executive. Officially, BMW does not want to comment on the progress of the cooperation.

The plans are delicate given the geopolitical and trade tensions surrounding China. China’s growing power in world trade coupled with concerns about human rights violations has been met with criticism for years. Since the Russian invasion of Ukraine, after which German companies suddenly had to scale back their involvement in Russia, the debate about the great dependence of German companies on the Chinese market has intensified.

In addition, recent reports of human rights violations in Xinjiang province have caused unrest. The Federal Ministry of Economics even denied Volkswagen guarantees for investments in the region. Unlike VW, however, BMW is not represented in the Uyghur province and has not applied for any state guarantees.

Export could speed up production schedules

For a long time, however, the Munich-based carmaker found it difficult to gain confidence in its new Chinese partner and therefore primarily wanted to serve the domestic market. But after a non-public presentation of the new electric Mini to American dealers in May, interest was so great that the BMW board of directors wants to decide by the end of the year whether the China Mini should be exported to the USA.

The US dealers even offered to pay the import duty due for the cars. Since 2019, the United States has imposed reciprocal punitive tariffs on car imports. The trade conflict that has been smoldering since then has prompted BMW to relocate part of its US off-road vehicle production to the Chinese plants.

So far, BMW has agreed a production capacity of 160,000 cars per year with Great Wall. However, the possible export of the China Mini to the USA could accelerate the production plans. The possible expansion of the project is also related to the technical competence of the Great Wall developers, which is rated as very high in Munich.

>> Read also: The car manufacturers want to get out of the combustion engine

This is a new experience for BMW. So far, BMW has been cooperating with the state-dominated Brilliance Group and produces around 700,000 sedans and SUVs in North China every year. But unlike Great Wall, Brilliance is a dying company.

This is one of the reasons why the government in Beijing allowed BMW to take over the majority of the joint venture at the beginning of the year – an unprecedented process in the industry. And it is a signal: Despite increasing trade and geopolitical tensions, BMW is continuing to expand its involvement in China.

The Great Wall technology was convincing in Munich

Great Wall Motors (GWM) is the leading Chinese SUV manufacturer. The company from Baoding, not far from Beijing, entered the market for electric vehicles relatively late. GWM has been building battery-electric small and compact cars for city traffic under the Ora brand since 2018.

The group also has an electric sedan in its range in the Wey luxury line. In 2018, the company spun off its battery business under the name SVolt, but retains access to this key technology.

In the highly competitive Chinese electric car market, however, Great Wall is struggling to catch up with domestic competitors BYD and Geely. This is another reason why GWM is focusing on foreign markets. At the International Motor Show (IAA) last fall in Munich, the Group presented both compact electric vehicles from the Ora Cat series and the Coffee 01 limousine from Wey, which should be available in Germany in the first half of 2022.

The newly developed Ora Cat models in particular attracted attention in the trade press and on social media, not only because of their playful design, but also because of the comparatively low price of around 30,000 euros.

GWM has been operating a development center for the European markets in Dietzenbach, Hesse, since 2016. In addition, the company opened its European headquarters in Munich in November, directly opposite BMW’s Research and Innovation Center (FIZ). “The European market is at the heart of GWM’s development strategy,” stressed European boss Qiao Xianghua at the time.

The cooperation still has great potential for BMW. By 2030, the small car brand Mini is to be completely converted to electric drives and at the same time become more profitable. According to company circles, Mini has never reached the specified target return of ten percent in recent years and is thus chronically burdening the return targets of the entire group. Arch-rival Mercedes has sold its loss-making small car brand Smart to the Chinese Geely group and promises its investors high returns in the luxury business.

With the cheap and at the same time powerful Chinese electrical engineering, the ten percent target for BMW seems to be within reach again. For this, the China technology would have to be adopted in the European plants in the medium term.

So far, the brand in Oxford has been built flexibly as a combustion engine, hybrid and electric car, while Leipzig manufactures the off-road models. With the possible export of the China Mini to the USA, the competition for the European locations is also growing.

More: BMW achieves record profit – what challenges the car manufacturer must now master