Less Britain

BMW plans to build electric Minis in China

BMW AG Unveil Concept Cars For Their Mini And Rolls-Royce Brands
Maximum hopes for the Mini. Source: Bloomberg

There was jubilation in Britain last summer when BMW announced its decision to build the first electric version of the Mini at its Oxford plant in 2019. It was seen as a welcome sign that the UK would still attract for foreign investment even as it extricated itself from the European Union.

But before a single electric Mini has been assembled, BMW has now announced a strategic decision that may have repercussions for its British factory.

BMW said on Friday it has signed a letter of intent with Great Wall Motor to jointly produce electric Mini vehicles in China. Both companies are “in advanced discussions,” BMW said.

A joint venture with Great Wall would give the Munich-based luxury automaker its first Mini plant outside Europe. The site would supply the Chinese domestic market, where BMW sold 560,000 cars last year – one-quarter of its total sales. The carmaker operates two BMW plants in China with its local partner Brilliance.

BMW’s compact-car brand Mini sold just 35,000 vehicles in China. But with local production, the carmaker hopes to further boost sales in the coming years. The battery-powered Mini will also help BMW fulfill its e-car quota in China. The Chinese government has set a target that 20 percent of all cars sold should be electric or rechargeable-hybrids by 2025.

“Production follows the market,” BMW said as it unveiled the plan. The carmaker’s medium-term strategy is to produce 600,000 cars in China and the same number in North America, with a total of more than three million vehicles assembled worldwide.

Great Wall, an automaker founded in 1984, became known on the Chinese domestic market mainly thanks to its SUVs. Last year, the company sold more than a million cars for the first time, making it one of the fastest growing automakers in China.

Friday’s announcement briefly mentioned BMW’s site in Britain, confirming that “production of the first battery electric Mini at the main plant in Oxford” would start in 2019.

In October, the carmaker said the Mini brand’s planned expansion in China did not undermine its commitment to production in Britain.

However, the move creates an alternative to the Oxford plant amid fears the site might become less attractive after Brexit. During the early stages of the Brexit process, BMW executives warned about the future of Mini’s Oxford plant, which currently meets demand for Minis in more than 110 markets.

Minis are currently made only in England and the Netherlands by Nedcar, a contract manufacturer. The BMW subsidiary sold 372,000 Minis worldwide last year, 60 percent of which were made in Britain. At the Oxford plant, the carmaker employs 4,200 people.

Markus Fasse writes about the aviation and automobile industry. To contact the author: fasse@handelsblatt.com

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