On July 23, BAIC Group announced that it will invest in Daimler AG to strengthen the long-term strategic cooperation between the two companies.
The transaction will allow BAIC to purchase 2.48 percent of Daimler shares and obtain additional voting rights equal to 2.52 percent of the company’s shares. The move shows that the two sides fully recognize the success of their long-term cooperation, since Daimler has also held shares and a board seat in BAIC Motor, a Hong Kong-listed company under BAIC Group, since 2013.
Chairman of BAIC Group, Xu Heyi, said, “BAIC Group and Daimler have been adhering to the principle of mutual trust and reciprocity. We have a history of cooperation of more than ten years and have achieved outstanding results. It has also been the will of BAIC Group to deepen the partnership between Daimler and the company. Investing in Daimler will enhance our cooperation and support for Daimler’s management and corporate strategy. The partnership between BAIC and Daimler is an excellent example of Sino-German cooperation and a model for cooperation between companies in the two countries. We look forward to working with Daimler to continue the success of our cooperation.”
BAIC Group and Daimler have been actively cooperating since 2005. Beijing Benz, a joint venture between BAIC and Daimler, has become the leader in the luxury car market in China. In 2012, Foton Motor, which is controlled by BAIC Group, established a joint venture with Daimler to produce trucks. Furthermore, in March 2016, BAIC Group acquired 35 percent of the shares of Fujian Benz, another subsidiary of Daimler.
In return, Daimler invested in BAIC Motor, a Hong Kong-listed car manufacturer owned by BAIC Group, and has since become a member of its board of directors, holding 9.55 percent of the shares. Daimler has also acquired part of the shares of Beijing New Energy Automobile, BAIC’s new energy vehicle power module company. The company was listed in 2018 and was later renamed Blue Valley. Daimler currently holds 3.01 percent of its shares.
BAIC Group and Daimler operate Daimler’s largest overseas R&D center in Beijing. In 2018, the sales volume of passenger cars produced by the two enterprises in China reached 485,000. In the first half of 2019, Beijing Benz sold 282,000 vehicles and continued to maintain high growth rates.