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Shanghai Auto Industrial Co. (SAIC) is now talking with BMW AG for future cooperation on BMW 7series project.
Information from SAIC said that the biggest China Auto Group is making negotiation with BMW AG for cooperation in China auto market. The new project is said to about BMW 7 series.
If this comes true it will be the first time for a high-end premium brand to localize its top product in China.
When reporter ask for official comments from SAIC or BMW China, the replies are “no”. But insider from SAIC told reporter that the information about this contact is true and this is the third time for both sides to talk about cooperation. But there are many uncertainties for this case so far and the talk is still in stage of confidential.
The first time of negotiation between SAIC and BMW was in 2005-2006, talking about acquisition of Rover brand. But eventually the brand was taken over by Ford according to the agreement between Ford and BMW before that.
The second time of the cooperation happened in 2007, talking about high-end brand project. When the financial storm happened right after the start, the negotiation stopped.
And this is the third time SAIC started the cooperation talk with BMW AG.

China is the biggest market for new BMW 7 series
Insider from SAIC told reporter that SAIC has a high-end Cadillac in hand but sale for the brand is very limited in China. Chinese seems do not like the American luxury brand or do not take it as a luxury brand at all. In order to full fill the high-end luxury product lineup, SAIC need a luxury brand partner.
For BMW the Brilliance project is not successful compared with its benchmark Audi in China. If BMW wants more in the emerging biggest auto market, BMW needs a more powerful partner and more localized models.
From the data published by BMW China is the No.5 market for the Germany Luxury brand and among all the China is the No.2 market for 7 series. In the first 8 months of 2009 China is the biggest market for BMW 7seires. In July of 2009 BMW 7 series even top Mercedes-Benz S Class to be the Luxury segment champion.
Actually after the US market shrinking, China became the most important overseas market for those luxury brand. China is now the biggest market for Mercedes-Benz S Class.
Since the born of BMW 7 series, it was only produced in Germany. If BMW wants more from China auto marker, to localize its 7 series is a choice not too bad. After all compared with Audi and Daimler, BMW has not many models to offer.

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BMW says no talks with SAIC on making 7 series

November 2, 2009
A Chinese newspaper reported today that SAIC Motor, China's biggest automaker, was in talks with BMW AG to produce the German company's 7 series model in China. But BMW has now dismissed the report as "a rumor."

The two sides had explored opportunity to manufacture premium cars in China around 2007, but the talks were suspended because of the global financial crisis, the Oriental Morning Post said, citing unidentified SAIC sources.

The companies have been in talks three times in the past about cooperation, including making high-end sedans in the country, the Shanghai-based semi-official newspaper said. SAIC can raise its brand image with help from BMW, the report said.

BMW AG denied this report later in the day, Bloomberg said. "It's not true," Sharon Li, a spokeswoman for BMW in China, said of the report. "It's a rumor," Li added.

She said BMW had a good business relationship with its partner Brilliance Auto, parent of Brilliance China Automotive Holdings, and had not approached other companies [in China] for a new partnership.

BMW and Brilliance make BMW 3 and 5 series in the northern Chinese cities of Shenyang.

SAIC said in an emailed statement that it would not comment on market speculation, Reuters reported.
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