Great Wall Motor, Spotlight ink framework agreement for R&D, product development services

Shanghai (Gasgoo)- Great Wall Motor (GWM) and Spotlight Automotive Limited (Spotlight) signed on June 12 a framework agreement for the transactions of product development, plant construction and management, manufacturing technique development, product procurement and consultation service, GWM announced.

From 2020 to 2023, GWM and its majority-owned subsidiaries (collectively called “the Group” for short) will procure from Spotlight the R&D services worth 1.734 billion yuan ($244,521,520), according to GWM’s announcement. Besides, the Group will also provide Spotlight with 2.651 billion yuan ($373,833,070) worth of R&D services during the same period.

The Group will assist Spotlight with manufacturing technique development and plant construction and management with a service value amounting to 144.24 million yuan ($20,340,130) for the period of 2020 to 2027.

Moreover, Spotlight will be supplied with consultation services from the Group during the 2020-2022 period, which involve businesses like information technologies and human resources.

GWM and its subsidiaries are likely to furnish Spotlight with automobile parts, while the transaction value should be determined based on future contract.

Founded in last December, Spotlight is a 50/50 joint venture between GWM and Germany's BMW Group, and is also the China's first joint venture co-built by foreign and privately-owned automakers.

Two parent companies celebrated the first spade cut of Spotlight's production base on November 29, 2019. The groundbreaking ceremony was held only a week after the joint venture was given the governmental green-light to produce internal combustion engine-powered vehicles (ICEVs) and conduct R&D activities for all-electric PVs. However, the approval is not available to BEV production. The company is required to get a separate approval before it starts producing NEVs.

At the end of 2019, Spotlight was granted China's governmental approval for establishment of enterprises with foreign investment, and the business license by the market regulation administration of Zhangjiagang, Jiangsu province.

Through the joint venture, both parent companies plan to co-build a global manufacturing base and a R&D hub for BMW-branded NEVs, and centers focusing on producing key components like engines and transmissions and developing carbon fiber-enabled lightweight business. Construction of those facilities are set to start in 2020 and expected to be completed two years later.

Involving a total investment of RMB5.1 billion, Spotlight is designed to feature a capacity of 160,000 vehicles on an annual basis. As well as MINI BEVs, the joint venture would also produce new models of Great Wall Motor.

As part of GWM's global strategy, Spotlight not only targets the domestic market, but aims to extend its outreach outside China. In the future, products yielded by the joint venture will be sold via different sales channels based on brands (photo source: Great Wall Motor).