Chinese law requires worldwide brands to partner with a domestic manufacturer to produce vehicles for the market. BMW said it planned to grow the Mini brand in China with a new local partner, without naming Great Wall.
"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 authorised to speak on the matter and declined to be identified.
BMW's China sales grew 11.3 percent a year ago.
Such a move would also allow BMW to export cars from China which are considerably cheaper to make, once the Brexit takes place and trade tariffs between the United Kingdom and the European Union are introduced.
"It is only possible to accelerate growth of Mini in China with a local partner", BMW said. But China's state planner has said that in principal it will not approve any new foreign joint ventures involving traditional gas-powered cars because the market is already oversupplied.
The German automaker has announced sales of electrified vehicles through the first three quarters of 2017 have already exceeded all of past year.
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 vehicle makers. Sergio Marchionne, CEO of FCA said his company won't consider selling Jeep as a separate entity and rejected the idea of making a deal with Chinese rival Great Wall Motor Co, reports Bloomberg.
Hong Kong - Great Wall Motor, China's biggest SUV maker, halted trading in its Hong Kong shares after they surged on media reports the company plans a tie-up with Germany's BMW.
The aim of the new partnership is so that BMW can increase production volumes and its market share in the EV segment.