Top Stories
Top Stories
Wires

UPDATE 1-Great Wall says BMW venture faces regulatory uncertainties

(Adds BMW comment, detail, background)

BEIJING, Aug 7 (Reuters) - China's Great Wall Motor on Wednesday said that its joint venture with BMW faced regulatory uncertainties as both companies pledged to proceed with plans for developing a low-cost electric car.

The stock market filing was made in response to media reports that the alliance was in trouble.

German newspaper Sueddeutsche Zeitung reported on August 4 that the tie-up could fail, citing sources familiar with the matter. 1/8https://bit.ly/2YPKkBN 3/8

Great Wall said in the statement: "At present, the project is proceeding as planned, and the two parties are communicating on the details of the cooperation and preparing for the project to seek approval from the relevant authorities."

There are uncertainties regarding whether the joint venture will be able to obtain the required regulation approvals, it said.

BMW signed an agreement with Great Wall last year to build an electric version of the Mini.

BMW said the joint venture was going very well in all work streams and significant progress was being made in all business areas.

Automakers and suppliers are scrambling to meet tough new Chinese quotas for less polluting cars. Those rules call for electric and rechargeable hybrid vehicles to account for a fifth of total sales by 2025.

Great Wall, which is China's top sport utility vehicle and pick-up truck maker, currently builds Ora, an affordable battery electric vehicle brand in Baoding, the city where it is headquartered.

The venture aims to build a plant in Zhangjiagang city with the capacity to build 160,000 gasoline vehicles for export and another 160,000 new energy vehicles, documents on the city's website show.

It will also have a research centre and car parts manufacturing facilities.

A separate local government document shows the total investment of the project is forecast at 20.2 billion yuan ($2.87 billion).

In February 2018, BMW said it had signed a letter of intent with Great Wall to produce a battery electric vehicles for the Mini brand in China.

($1 = 7.0450 Chinese yuan renminbi) (Reporting by Yilei Sun, Brenda Goh and Edward Taylor; editing by Jan Harvey and Jason Neely)