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BMW eyes possible electric vehicle joint venture in China: sources

SHANGHAI/BEIJING (Reuters) – German luxury automaker BMW is looking to form a joint venture with Great Wall Motor in China, which could focus on electric vehicles, according to two sources familiar with the matter on Wednesday.

A venture with Great Wall, whose Hong-Kong listed shares leapt 20 percent on the news, would be BMW’s second in the world’s largest auto market, where foreign carmakers have to team up with local partners.

“We are in discussions with Great Wall about setting up a joint venture to produce cars in Changshu,” said a BMW executive, who was not authorized to speak on the matter and declined to be identified.

Another person familiar with the matter said the new joint venture in the eastern city of Changshu would not deal with gasoline or diesel powered cars, indicating a focus on electric vehicles was likely.

BMW’s China sales grew 11.3 percent last year. It is the country’s second-largest premium brand after Volkswagen AG’s (VOWG_p.DE) Audi AG. BMW is trying to stay ahead of third-place Daimler’s Mercedes-Benz, which recorded 26.6 percent growth in China sales in 2016 thanks to a fresher model lineup.

Car manufacturers have recently announced a raft of investments and tie-ups in China.

Tesla, Ford Motor Co, Daimler AG, and General Motors are among those that have already announced plans for making electric vehicles in China.

ELECTRIC MINI?

BMW and rival Mercedes are betting they can mass produce new electric cars based on conventional vehicle design, defying skeptics who say they will need more radical plans to head off the threat from Tesla and other start-ups.

Bernstein analysts said they believed that any new venture of BMW and Great Wall would have to sell exclusively electric vehicles (EVs), given China’s moratorium on approvals for new gasoline car businesses.

“If an agreement were to be reached, we’d expect an arrangement like Denza (Mercedes-BYD), or VW-JAC, Ford-Zotye to be the most plausible outcome, whereby a new brand is used to sell EVs,” they said in a note, adding that the vehicles could be sold under the Mini brand.

FILE PHOTO: A Great Wall Motors Haval hybrid vehicle is presented during the Auto China 2016 auto show in Beijing, China, April 29, 2016. REUTERS/Damir Sagolj/File Photo

China wants electric and hybrid cars to make up at least a fifth of the country’s auto sales by 2025 and plans to loosen joint-venture regulations to achieve its aim.

BMW already has a joint venture in China with local carmaker Brilliance China Automotive Holdings and produces cars at two plants in Shenyang. Shares in Brilliance fell on Wednesday.

“Our business development with the joint venture BMW Brilliance Automotive will continue as planned, and we will carry on to invest and develop our joint venture.” a spokesman for BMW said, declining to comment on any new joint venture.

Slideshow (3 Images)

The plans were first reported by Shanghai-based www.iautodaily.com earlier on Wednesday.

“I don’t know how far along we have gone nailing this deal,” or whether the two companies have official central government approval for the venture, the BMW executive said.

A Great Wall official declined to comment.

Great Wall, which in August expressed an interest in the Jeep brand of Italian-American automaker Fiat Chrysler Automobiles NV‘s, is one of China’s largest car makers.

Last month it struck a deal to secure supplies of lithium, a mineral key for developing electric vehicles.

The firm’s shares soared as much as 19.2 percent to their highest level in over two years, before paring some gains to stand up 14 percent in afternoon trade. Its Shanghai-listed shares were suspended from trading, pending an announcement.

Brilliance China Automotive’s shares were down 2.76 percent.

Brokerage Jefferies said in a note that it was “understandable that BMW needs a new partner to defend its market share in a more competitive market”, and expected that the move would hit current partner Brilliance.

Reporting by Adam Jourdan in SHANGHAI and Norihiko Shirouzu in BEIJING; Additional reporting by Irene Preisinger; Editing by Neil Fullick and Elaine Hardcastle

Tech

Self-driving car advocates launch ad campaign to prod Congress

WASHINGTON (Reuters) – A coalition of supporters of self-driving cars said on Tuesday that it will run ads this week in social media and Washington newspapers, in an effort to convince the U.S. Congress to adopt sweeping legislation to boost the nascent industry.

The ads are being placed by the Coalition for Future Mobility, which was formed in July by trade groups representing major automakers, along with other advocates for self-driving cars, as Congress began serious consideration of bills relating to autonomous vehicles.

They want the Senate to pass a bill that would speed up the use of self-driving cars by easing safety regulations, and bar states from blocking such vehicles. The House of Representatives has already unanimously approved a bill.

The Senate is considering a similar draft measure, but is divided over whether to include large commercial trucks, a dispute that could prevent the bill from winning approval this year.

The House measure, which only applies to vehicles under 10,000 pounds (4,536 kg), would allow automakers to obtain exemptions to deploy up to 25,000 vehicles without meeting existing auto safety standards in the first year. The cap would rise over three years to 100,000 vehicles annually.

As part of the campaign, major automakers will be contacting their employees and retirees, asking them to reach out to their members of Congress, a spokeswoman for the Alliance of Automobile Manufacturers said.

The coalition launched a website and will use targeted Facebook advertising, focusing on groups who could benefit from autonomous vehicles, such as disabled veterans.

One of the print ads seen by Reuters features a man dressed in military fatigues sitting in a wheelchair. The ad says: “He fought for our freedom. Let’s give him back his.” That “will only become a reality if Congress acts,” the ad says.

The coalition includes trade groups representing automakers General Motors Co, Toyota Motor Corp and Volkswagen AG (VOWG_p.DE), as well as organizations including ride sharing firm Lyft Inc, the Telecommunications Industry Association, the American Council of the Blind and a drone industry group.

Senate aides have been negotiating in recent days but have not reached agreement. A Senate panel could take up the issue at an Oct. 4 hearing, aides say.

Auto industry leaders say 3 million commercial truck jobs could eventually be at risk if self-driving vehicles replaced human drivers.

Self-driving proponents say 94 percent of U.S. car crashes are the result of human error and argue self-driving cars could dramatically cut the 35,000 annual road deaths.

Reporting by David Shepardson, Editing by Rosalba O’Brien

Our Standards:The Thomson Reuters Trust Principles.

Tech

Arnold Schwarzenegger Will Reteam With James Cameron for the Next Terminator Movie

Arnold Schwarzenegger has just announced he’ll be starring in the next Terminator movie, which is not at all a big deal. It’s definitely less exciting than the news from January that James Cameron would be regaining rights to the franchise he created, and was working on a new, possibly good Terminator film. But…

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