Stuttgart (Germany), Feb 2 (IANS/DAPD) Car manufacturer Daimler is hoping to improve its stuttering performance on the Chinese automobile market by strengthening its partnership with the Beijing Automotive Group (BAIC).
The Stuttgart-based company has purchased a 12-percent stake in the Chinese state producer's passenger vehicle business, BAIC Motor, announced Daimler in Baden-Wurttemberg Friday. Both companies agreed on the deal in the run-up to a planned IPO by BAIC.
Daimler has recently performed poorly on the Chinese market, particularly when compared to industry rivals BMW and Audi. Munich-based competitor BMW increased sales for its China business by 40 percent last year, with total vehicle sales amounting to 326,000 units. Audi's performance was also impressive, reaching just under 406,000 cars sold over the same period. Mercedes-Benz sales, in contrast, only hit 196,211 vehicles - just 1.5 percent more than in 2011.
With its new share purchases in BAIC Motor, Daimler was "initiating the next step in (its) cooperation and significantly expanding (its) relationship with BAIC", according to CEO Dieter Zetsche. The agreement, he said, served to underline the "long-term intention of both partners to fully utilize the common opportunities and potential of the Chinese automobile market".
According to the agreement, Daimler is set to receive two seats on the supervisory board of BAIC Motor. At the same time, BAIC is to increase its stake in the joint Daimler-BAIC subsidiary Beijing Benz Automotive Company by one percent, reaching 51 percent. In return, Daimler is to increase its share in the joint Beijing Mercedes-Benz Sales Service Co by one percent, with its total stake also totaling 51 percent.
The deal is still awaiting the approval of Chinese authorities. The transaction is expected to be completed by the end of 2013 or early 2014.