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Chinese company BAIC Motor Corp. bought 5% of the German luxury car manufacturer Daimler. The agreement strengthens the long-term partnership of the two companies after BAIC Motor – Geely's competitor also bought part of the European company. Daimler, in turn, holds a stake in a subsidiary of BAIC in 2013.
Despite the last agreement, the main shareholder of the German company remains the other Chinese company – Geely. Once the transaction is finalized, Asian companies will hold approximately 15% of the Mercedes manufacturer.
The president of the Chinese company Heyi Xu said that this step is important for the good relationship between the partners.
Earlier in May, it became clear that BAIC was attempting to take a stake in Daimler in order to consolidate its total investment in the Chinese manufacturing company Mercedes-Benz, Beijing Benz Automotive.
For the Chinese company, the partnership with the German manufacturer is of strategic importance, just like the other joint venture of the Chinese company with Hyundai Motor Co. there are problems and the local brands lose losses because of the trade war and the tightening of the US auto market.
The Daimler stock rose 0.9% early in the session in Frankfurt today. Over the past year, the company's shares have dropped 15%, as the company has warned four times that its profits will decline this year due to weaker demand and higher provisions for loss. from the Dieselgate scandal.
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