Daimler aims for China impetus with BAIC Motor stake


"Daimler's investment in BAIC's stake will go a long way in accelerating the development of BAIC's self-owned brand in terms of capital, technology, management, and brand. At the same time, this will help Mercedes-Benz to boost its business performance in China," said Xu Heyi, Chairman of BAIC.

The IPO of BAIC Motor would see it follow rivals Dongfeng Motor Group Co and Geely Automobile Holdings Ltd onto the more international Hong Kong market, eschewing the Shanghai stock exchange.


Daimler's inability to keep pace with its two German rivals in China has made it that much harder for Chief Executive Dieter Zetsche to achieve his goal of overtaking them as the world's largest premium carmaker by 2020.

Whereas BMW sales soared 40 percent in China to around 303,000 vehicles last year and Audi gained 30 percent to nearly 406,000 cars, Mercedes sales barely budged from their far lower level.

The historic marque could only manage a 1.5 percent increase to just over 196,000 vehicles over the past year - poor figures given the market's potential.

"On an international base, China will be probably be the biggest market in the long run as a single market," Audi Chief Executive Rupert Stadler said in Beijing on Friday, adding that he plans to ramp up his production capacity to 700,000 vehicles in the longer term.

By securing a stake in BAIC Motor ahead of its IPO, Daimler has pulled off a rare feat that could help it regain an edge over the competition.

While Chinese companies have been on a buying spree in Europe recently, such as Sany's purchase of machinery group Putzmeister and Shandong Heavy's 25 percent stake in fork lift truck maker Kion Group, investments in the other direction are not as common, and often hindered by foreign ownership rules.

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