Shares in China's biggest SUV maker Great Wall Motor Co. (GWLLY) were suspended Thursday, Oct. 12, after surging 14% a day earlier on reports that it was nearing a deal with BMW AG (BMWYY) to make the German group's iconic Mini in China.
Trading in Great Wall stock on the Hong Kong exchange was halted pending clarification of the press reports, the company said in a statement. Neither Great Wall nor BMW have commented on the possible tie up, though a BMW executive said the reports were "generally true", according to Reuters.
Great Wall shares closed Wednesday at HK$11.30 ($1.45), up HK$1.44, their highest price since mid-2015. The stock did not trade on Thursday. Great Wall's Shanghai stock has been suspended since Sept. 22.
The reports of a planned tie up, which first appeared on Chinese website iautodaily.com, mark the second time in quick succession that Great Wall has been linked with an iconic western brand. It was reported, in August, to be exploring the acquisition of Fiat Chrysler Automobiles NV's Jeep and later confirmed its interest before downplaying the likelihood of a deal noting that there was "substantial uncertainty" that it would make an offer.
The small and sporty Mini is considered an icon of British design but has been in German hands since BMW acquired the maker Rover Group from British Aerospace in 1994. Under the German owner the brand was relaunched and revitalized with new two-door and four-door models manufactured in England and Austria. BMW shipped more than 230,000 of the model in the first eight months of this year.
A BMW deal with Great Wall could be part of a wider plan to launch an electric Mini, which BMW announced earlier this year. BMW's Oxford, England-based plant was chosen to make the electric version, but the company could also have its eye on sales in China, where the government is pushing hard for a rapid increase in electric vehicles. Beijing last month ordered car makers to make a minimum number of electric cars by 2019 and loosened regulations to allow foreign carmakers to establish wholly-owned electric car businesses in China.
Great Wall is preparing for the switch to electric vehicles, and in late September became the first Chinese car maker to buy a stake in a foreign lithium mining company when it snapped up 3.5% of Australia's Pilbara Minerals.
BMW already builds cars in China through a joint venture with Brilliance China Automotive Holdings Ltd. Brilliance's Hong Kong listed shares traded Thursday at HK$21.50, up just over 1% after they fell 2% on Wednesday. BMW shares traded Thursday down just over half a percent at €87.89 ($104.27).
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