China's BAIC Purchases Five Percent of Daimler

Matt Posky
by Matt Posky

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.

[Image: Franz12/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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 25 comments
  • R Henry R Henry on Jul 23, 2019

    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.

    • See 13 previous
    • Inside Looking Out Inside Looking Out on Jul 24, 2019

      @dukeisduke No need for that. Western partners have negative population growth - they will go away naturally. Unfortunately the same is true for China. But thanks to enormous population they will disappear much later.

  • APaGttH APaGttH on Jul 23, 2019

    Between the Geeley, errr Volvo recall and now this, someone needs to do a welfare check on deadweight.

    • See 6 previous
    • TheDumbGuy TheDumbGuy on Jul 25, 2019

      @dukeisduke Or DW sleeps with the fishes...

  • Dukeisduke Dukeisduke on Jul 24, 2019

    So Daimler is looking to improve their quality?

    • Lorenzo Lorenzo on Jul 25, 2019

      Um, no. The way German companies work, the Chinese are just buying stock, not control. Having Chinese minority ownership might just insulate Daimler from Chinese government action against Daimler interests in China. OTOH, China might be trying to buy allies in international trade issues.

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