Chinese Automaker BAIC Buys a 5% Stake in Daimler
【Summary】China’s Beijing Automotive Group Co Ltd (BAIC) has bought a 5% stake and voting rights in German automaker Daimler, as the company looks to fend off competition from rival automaker Geely.

China's Beijing Automotive Group Co Ltd (BAIC) has bought a 5% stake and voting rights in German automaker Daimler, as the company looks to fend off competition from rival automaker Geely.
Geely, the parent company of Swedish automaker Volvo Cars, emerged as a possible rival to BAIC after Li Shufu, the chairman of rival Zhejiang Geely Holding, bought a 9.69% stake in Daimler with the aim of forging an alliance to develop electric and self-driving cars in the world's biggest auto market.
The latest investment from BAIC gives two Chinese automakers a 15% percent stake in Daimler.
"This step reinforces our alignment with, and strong support for, Daimler's management and strategy," BAIC chairman Heyi Xu said on Tuesday.
BAIC and Daimler operate Mercedes-Benz factories in Beijing through Beijing Benz Automotive, a joint venture between the companies established in 2005. Daimler holds a 49% stake in the joint venture with BAIC owning the remaining 51%.
Reuters reported in May that BAIC was seeking to buy a stake of up to 5% in Daimler as a way to secure its investment in Beijing Benz Automotive. Daimler said it welcomed BAIC's investment.
"The purchase of Daimler shares by BAIC will strengthen the cooperation between BAIC and Daimler," said Jefferies analyst Patrick Yuan.
"From this point of view, the possibility of Daimler increasing its stake in the Beijing Mercedes-Benz joint venture will be greatly reduced, which will benefit the shareholders of BAIC's listed companies."
China Removing Caps on Foreign Ownership of Joint Ventures
In April 2018, China announced an overhaul of regulations governing its auto industry amid escalating trade tensions with the U.S. Foreign auto makers were previously required to build vehicles in China through joint ventures with a chinese partner automaker, in which they could hold a 50% stake at most.
The new rules allow them to own all of their Chinese operations and foreign automakers are buying a bigger stake in their joint ventures. For electric automaker Tesla, the relaxing of the rules means its can enter the world's biggest auto market without a partner while avoiding steep import tariffs.
Tesla will build the Model 3 and upcoming Model Y crossover at its Shanghai Gigafactory, which is currently under construction and set to open later this year.
Daimler rival BMW become the first foreign automaker to take advantage of the new regulations. In Oct 2018, BMW paid around $4 billion to increase its stake in its joint venture with Brilliance China Automotive Holdings Ltd. to 75% from 50%. The new joint-venture agreement lasts through 2040.
Shares in Daimler rose by more than 2.5%, while BAIC's listed subsidiaries, BAIC Motor Corp and BAIC BluePark New Energy Technology, climbed by more than 3% and 5% respectively after the news.
Daimler has reassured BAIC that any new industrial alliances involving Mercedes and a Chinese partner would only happen after a consensus is found with BAIC.
In March, Daimler agreed to build the next generation of its tiny Smart city cars together with Geely, which is based in Hangzhou.
resource from: Reuters
-
Lucid’s New ‘Stealth Look’ Appearance Package for the Electric Air Sedan Compliments its High Performance DNA
-
Toyota’s Redesigned Prius May Get More Drivers Behind the Wheel of a Hybrid Vehicle
-
Toyota to Collaborate With Texas-based Utility Provider Oncor to Accelerate a Vehicle-to-Grid EV Charging Ecosystem
-
Stellantis to Idle its Illinois Assembly Plant Indefinitely, Citing the High Costs of Electric Vehicles
-
Apple Delays its Long Rumored Electric ‘Apple Car’ Until 2026, According to Sources
-
The World’s First Level-4 Automated Parking Feature Developed by Mercedes-Benz and Bosch is Approved for Commercial Use
-
Hyundai Motor Group Signs MoU with SK On Co. to Secure Batteries for EVs Built in the U.S.
-
Tesla May Build its Next Factory in South Korea, According to the Country’s Presidential Office
- BMW i Ventures Invests in Vendia, a Next-Gen Blockchain Company Helping Businesses to Securely Share Data With Third Parties
- China’s Baidu Reveals the Apollo RT6, a Fully Autonomous, Production Ready Level-4 Robotaxi with Removable Steering Wheel
- Tesla May Build its Next Factory in South Korea, According to the Country’s Presidential Office
- Automaker BYD is Emerging as One of Tesla’s Biggest Competitors in China, Latest Vehicle Registration Data Shows
- Ford is Investing $3.7 Billion and Adding Over 6,200 UAW Manufacturing Jobs in the Midwest to Produce New Vehicles
- Redwood Materials is Building an Electric Vehicle Battery Recycling Facility in South Carolina
- Tesla Rival XPeng Inc. to Start Deliveries of its New Flagship G9 Electric SUV in September, CEO Confirms After Sharing New Details
- NHTSA Opens Investigations Into Two New Fatal Tesla Accidents
- Volkswagen’s Software Unit CARIAD to Co-Develop a System-on-Chip With STMicroelectronics for the Automaker’s Future Software-defined Vehicles
- Tesla Believes Its Dojo AI System Will Help It Win the Self-Driving Car Race