Daimler takes 12% stake in partner Beijing Auto
Daimler AG, the third-biggest maker of luxury cars, agreed to buy a stake in the car unit of Chinese partner Beijing Automotive Group Co. to spur efforts to catch up with rivals Audi and BMW.
The parent of Mercedes-Benz will acquire 12 percent of BAIC Motor, Daimler said Friday in a statement. The Beijing-based partner will grant Daimler two seats on the unit's board of directors.
The investment is "significant, so that both companies can actively participate in the opportunities of the Chinese automotive market," Daimler CEO Dieter Zetsche, who is also head of the Mercedes car business, said in the statement.
Zetsche has vowed to retake the top spot in worldwide luxury vehicle sales by the end of the decade after Mercedes fell behind BMW AG in 2005.
"It's a long-term investment which secures Daimler an exclusive access to the partner," said Christoph Stuermer, a Frankfurt-based analyst with research company IHS. The board seats will allow Daimler to have a say at the partner and start negotiating projects at an early stage, he said.
Daimler's investment in BAIC Motor is through the issuance of new shares. The transaction is expected to close by the end of this year or early next year, it said.
BAIC will increase its stake in its production joint venture with Daimler in China to 51 percent from 50 percent, the companies said. Owning the majority of Beijing Benz Automotive Co., which produces the Mercedes C- and E-Class sedans and GLK sport-utility vehicle, adds to the value of BAIC's auto unit, which is planning an initial public offering.
BAIC is considering an IPO in Hong Kong to raise 10 billion yuan ($1.6 billion), Chairman Xu Heyi said in September.
European market
As European auto sales head into a sixth consecutive year of decline, German luxury-car makers are looking abroad for growth. In China, buyers tend to opt for fully loaded upscale vehicles, resulting in higher returns for the manufacturers.
Mercedes deliveries in China rose 1.5 percent to 196,211 cars in 2012. Audi sales jumped 30 percent to 405,838 vehicles. BMW-brand deliveries surged 40 percent to 303,169 cars.
In December, Mercedes established a management-board position dedicated to the country. The company assigned Hubertus Troska, formerly head of the Mercedes-Benz trucks business, to the post.
The German manufacturer and BAIC have also set up a jointly owned sales organization, which combines previously separate marketing of imported and locally produced cars. Daimler will raise its stake in the sales partnership to 51 percent from 50 percent.
Daimler's passenger car unit plans to add 50 dealerships in China this year, expanding the sales network to 270 showrooms.
The investment is "significant, so that both companies can actively participate in the opportunities of the Chinese automotive market," Daimler CEO Dieter Zetsche, who is also head of the Mercedes car business, said in the statement.
Zetsche has vowed to retake the top spot in worldwide luxury vehicle sales by the end of the decade after Mercedes fell behind BMW AG in 2005.
"It's a long-term investment which secures Daimler an exclusive access to the partner," said Christoph Stuermer, a Frankfurt-based analyst with research company IHS. The board seats will allow Daimler to have a say at the partner and start negotiating projects at an early stage, he said.
Daimler's investment in BAIC Motor is through the issuance of new shares. The transaction is expected to close by the end of this year or early next year, it said.
BAIC will increase its stake in its production joint venture with Daimler in China to 51 percent from 50 percent, the companies said. Owning the majority of Beijing Benz Automotive Co., which produces the Mercedes C- and E-Class sedans and GLK sport-utility vehicle, adds to the value of BAIC's auto unit, which is planning an initial public offering.
BAIC is considering an IPO in Hong Kong to raise 10 billion yuan ($1.6 billion), Chairman Xu Heyi said in September.
European market
As European auto sales head into a sixth consecutive year of decline, German luxury-car makers are looking abroad for growth. In China, buyers tend to opt for fully loaded upscale vehicles, resulting in higher returns for the manufacturers.
Mercedes deliveries in China rose 1.5 percent to 196,211 cars in 2012. Audi sales jumped 30 percent to 405,838 vehicles. BMW-brand deliveries surged 40 percent to 303,169 cars.
In December, Mercedes established a management-board position dedicated to the country. The company assigned Hubertus Troska, formerly head of the Mercedes-Benz trucks business, to the post.
The German manufacturer and BAIC have also set up a jointly owned sales organization, which combines previously separate marketing of imported and locally produced cars. Daimler will raise its stake in the sales partnership to 51 percent from 50 percent.
Daimler's passenger car unit plans to add 50 dealerships in China this year, expanding the sales network to 270 showrooms.
