GWM Issued Announcement about Investment in Russia and Business Cooperation with BMW

According to German media reports, due to strategic and cultural differences, the joint venture between Great Wall Motor (GWM) and BMW may face the danger of failure. In response, GWM announced that the media reports alleging that the joint venture project between the company and the BMW had encountered changes are untrue. Currently, the project is proceeding as scheduled, and both parties thereto are negotiating on specific cooperation plans and preparing for submitting project application to relevant competent authorities. In addition, in this announcement, GWM also clarified the issue of “signing a special investment contract with the Russian government”.

GWM responded to “changes encountered in the joint venture project between the company and the BMW”

In response to this incident, GWM issued an announcement saying: Upon entering into the joint venture contract, the research and development employees and management members of both parties have had frequent discussion and communication among one another. Currently, the project is proceeding as scheduled, and both parties thereto are negotiating on specific cooperation plans and preparing for submitting project application to relevant competent authorities. The media reports alleging that the joint venture project between the Company and the BMW had encountered changes are untrue.

Last July, BMW and GWM signed an agreement on the made-in-China MINI brand electric vehicle and established a joint venture company Spotlight Automotive Ltd. The project is BMW's first pure electric vehicle joint venture project in the world. The total investment in this cooperation is 5.1 billion yuan, and each party holds 50%. The Spotlight automobile plant is located in Jiangsu Province, and the planned production capacity is 160,000 units per year. According to the plan, the first model of the GWM and BMW joint venture will be launched in the first half of 2021.

GWM clarified the media reports of “Investment in Russia”

In addition, GWM also clarified about signing a special investment contract with the Russian government. GWM said: At present, the Russian Federation Government has approved a wholly-owned subsidiary of GWM may enter into a special investment contract with relevant Russian departments and state governments. As of the date of the announcement, the Special Investment Contract is yet to be entered into.

And if so, the Company shall commit to invest an overall amount of RUB42.4 billion (equivalent to approximately RMB4.556 billion, which is translated at the central parity rate of RMB1 to RUB9.307 published by the State Administration of Foreign Exchange of the PRC on 7 August 2019) to the automobile production base wholly-owned by the Company in Russia, (including investment in a portion of the automobile plants of the first phase, investment in the automobile plants of the second phase and investment in extensive localization for the next decade) for the construction of an automobile production plant of SUV models with deeply localized core parts and components, such as engines and transmissions.

In June 2019, the construction of the first phase of the plant was completed, with an expected annual production capacity of 80,000 units of automobiles, and it will mainly manufacture H9 and F7 models. And the construction of the second phrase would depend on the operational results of the first phase and economic prospect of the project, and the total investment was expected to be approximately RUB18 billion (approximately equivalent to RMB3.2 billion).