Geely Group Owner Enjoying His 103,619,340 Shares in Daimler
Unlike German auto titans BMW Group and Volkswagen Group, Mercedes-Benz parent company Daimler didn’t have the stabilizing effect of a family or individual with a massive, long-term cache of company shares. That’s no longer the case, as Geely Group owner Li Shufu has announced his purchase of a 9.69 percent stake in the German automaker.
This makes Shufu Daimler’s largest single shareholder.
The Chinese auto tycoon, whose Zheijang Geely Holding Group manages car-producing Geely Group, already owns Volvo Cars and Lotus, and is a major shareholder in truck builder Volvo AB. Always on the hunt for opportunities, the near 10-percent stake in Germany’s largest luxury automaker should give Shufu the partnership he’s looking for.
“Daimler is an outstanding company with a first-class management. It will be an honor to support this unique team under the leadership of Dieter Zetsche in the future,” said Shufu in a statement. “I am particularly pleased to accompany Daimler on its way to becoming the world’s leading electro-mobility provider.”
Neither Geely Group nor any other subsidiary in the holding company plan to purchase more Daimler shares, at least “for the time being.”
While Shufu didn’t go into further product details, the share buy reportedly comes with the intent to partner with Daimler on electric vehicle production. Having access to the German company’s electrification technology would give Geely a technological edge in both the rapidly growing (and EV-heavy) Chinese market and the automaker’s export markets. To Shufu, the industry is now on a war footing, fighting against marauding high-tech startups.
“The competitors which technologically challenge the global car industry in the 21st century are not part of the automotive industry today,” he said. “But with challenges come opportunities. No current car industry player will be able to win this battle against the invaders from outside independently. In order to succeed and seize the technology highland, one has to have friends, partners, and alliances and adapt a new way of thinking in terms of sharing and united strength. And we have act now.”
For its part, Daimler seems pretty pleased that Shufu’s in it for the long haul.
Stating that its new shareholder recognizes the “innovation strength, the strategy and the future potential” of the automaker, Daimler said it “knows and appreciates Li Shufu as an especially knowledgeable Chinese entrepreneur with clear vision for the future, with whom one can constructive discuss the change in the industry.”
[Image: Daimler AG]
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There are two sides to Daimler being eventually owned by Geely. One side is that the good paying jobs in Germany could eventually go away with most of the manufacturing done in China. At the same time if Geely does eventually get a controlling interest in Daimler they probably will follow a similar path as they have with Volvo by not making any immediate major changes. The other side of the argument is that China is now the major market for growth in new vehicle sales and Geely gives them a huge opportunity for sales growth in China. With over 300 million Chinese now middle class and upper class this is a huge market. With the increased use of robots labor costs will become less a determining factor of where to produce vehicles and shipping costs and ability to react to shifts in demand will become more critical. I don't see all the manufacturing jobs going to China especially when more robots are and will be used. Chinese labor is starting to demand higher wages and benefits which will make China not as attractive labor wise. Nothing ever stays the same and we could eventually see more manufacturing jobs come back to the US but with less labor (less lower skilled labor) but demand for higher skilled labor to operate and repair the robots. Even China will increase the use of robotics in manufacturing as well.
Three Things: 1. 10% is not a majority ownership. If Geely would get close to majority ownership (or some such predetermined number); I imagine the Germans would say that Daimler was a "vital national asset" or such and pass laws forbidden Geely to own it/do a takeover. Yeah, "Germany" and "National" don't make a pleasant sentence for many. 2. Many people drive EVs/Hybrids because they like them. EV instant torque and low maintenance is sweet. (Anecdotal Evidence) My boss 'wife got 300000 miles on her Prius. She got another Prius; he traded his Escalade (many electrical problems)for a Velosoter commuter beast and they have a Dodge Cummins for hauling the boat/weekend play duty. She's a nurse, he's a electrical engineer. So NO, "virtual signalling" or whatever the right wing wingnuts (snowflakes?) wanna call it doesn't come into play. 3. For all the Nuvolairi/Vukovitch types out there; please tell us where these low density drivers roads are. I drive on South Capital street in Washington D.C. and it is truly 3rd world quality. For D.C. commuters taking I-95/295/395 traffic is usually not fun. Not a bit. When I lived in Alexandria VA there were Fridays where it took me an hour and half (90 minutes in Buick time) to go nine miles. A bicycle would've been faster. An hour and a half to go nine miles; that's why many of us don't drive stick and look forward to self-driving pods. MMMKay?