China's BAIC Purchases Five Percent of Daimler
Beijing Automotive Group Co Ltd (BAIC) announced on Tuesday that it had purchased a 5 percent stake in Daimler AG. Despite the pair have been partners in Asia since 2003, via the Beijing Benz Automotive joint venture, Zhejiang Geely Holding Group purchased nearly 10 percent of the German company in 2018 and was reportedly seeking high levels of cooperation.
As one of Geely’s direct rivals, BAIC claimed its investment would help solidify the relationship with Daimler. “This step reinforces our alignment with, and strong support for, Daimler’s management and strategy,” BAIC chairman Heyi Xu said in an official statement.
Daimler confirmed the investment with the head of Mercedes-Benz, Ola Källenius, making his own announcement later in the day. “We are very pleased that our long-standing partner BAIC is now a long-term investor in Daimler,” he said. “This step reinforces our successful partnership and is a signal of trust in the strategy and future potential of our company. The Chinese market is and remains a crucial pillar of our success — not only for sales, but also for our product development and production.”
While Daimler has not walked back plans with Geely to establish a ride-hailing venture or the plan to jointly assembly Smart EVs in China by 2022, its standing arrangements with BAIC also remain intact. The pair already collaboratively manufacturer and develop automobiles Asia — so it’s unclear how (or if) the new investment will change anything. Naysayers remain concerned over the possibility of losing intellectual property to Asian companies. Advocates are just happy to see new investments and a spike in Daimler’s share price.
The Chinese "partners" are ensuring ongoing access to Western technologies and developments. Such a pity that Western corporations are willing to share their intellectual property just to get access to that market. I believe Daimler, along with VW, GM, and all the others who have entered into manufacturing "partnerships" there will come to regret their strategies.
Between the Geeley, errr Volvo recall and now this, someone needs to do a welfare check on deadweight.
So Daimler is looking to improve their quality?