Daimler Said to Take Chinese Partner Stake to Push Growth
Daimler AG (DAI) plans to buy a stake in Beijing Automotive Group Co.’s car unit to secure influence at the German automaker’s Chinese partner ahead of an initial public offering, two people familiar with the matter said.
Daimler, the world’s third-largest maker of luxury cars, may announce as soon as this week that it’s taking a holding of 10 percent to 20 percent in BAIC’s auto division, said one of the people, asking not to be identified because the discussions are private.
BAIC would increases its ownership in the production joint venture that the two operate in China to 51 percent as part of the transaction, the person said. Currently, each partner has 50 percent of Beijing Benz Automotive Co., which builds Mercedes C- and E-Class sedans and the GLK sport-utility vehicle.
Daimler Chief Executive Officer Dieter Zetsche said earlier this month at the Detroit auto show that the German automaker is negotiating its role in a possible BAIC share sale, without giving details. The two also jointly own the marketing and sales organization Beijing Mercedes-Benz Sales Service Co., which was set up in December to combine marketing of imported and locally produced cars.
“We don’t comment on speculation,” Florian Martens, a Daimler spokesman, said by phone. Zheng Gang, a BAIC spokesman, referred queries to Daimler. China Daily yesterday reported the transaction, citing unidentified sources close to BAIC.
Zetsche has vowed to retake the top spot Mercedes lost to Bayerische Motoren Werke AG in 2005 by the end of the decade at the latest. Volkswagen AG (VOW)’s Audi, No. 2 in global luxury sales since 2011, is pursuing the same goal. Mercedes fell further behind BMW and Audi in sales last year as it grew more slowly in China, the world’s biggest car market, than its two rivals.
Daimler, based in Stuttgart, Germany, has named Hubertus Troska to its board with responsibility for China and is working with BAIC to improve its lagging sales growth.
Daimler would seek a seat on BAIC’s board as part of the stake purchase, one person said.