Beijing Automobile Group Co Ltd, a state-owned holding company of car manufacturers, has reportedly laid eyes on increasing its ownership with Germany's Daimler AG. This was according to unnamed sources who spoke with Reuters under the condition of anonymity.
BAIC already owned as a 5% shareholding in Daimler. The sources claimed it looks to increase that to at least 10% more. Reuters said BAIC has started buying Daimler stocks from the open market.
With its 5% shareholding in Daimler, BAIC is already the German automaker's third-largest shareholder. The turn of events could mean that BAIC's ownership would be bigger than Zhejiang Geely Group. The latter owns 9.69% of the Mercedes-maker.
If reports were true that it will up the stake in the Mercedes owner by 10%, BAIC could easily position itself as Daimler's biggest shareholder. Further, it can have representation at Daimler's supervisory board, something that Geely failed to have.
The whole situation could also mean that Germany's Daimler would have 20% shareholding that could belong to Chinese owners.
Daimler denied commenting on the matter. Reuters reported that the German carmaker denied being subjected to such a proposal. Nonetheless, Daimler is extremely willing to welcome long-term investors, chief Hubertus Troska said. Troska oversees operations in China.
As for BAIC directly, he said Daimler would welcome its potential increase in shares. He added that BAIC and Daimler are fond of each other as business partners.
Other reports claimed that BAIC's plan of increasing stakes in Daimler is two-pronged. One, as already mentioned, is to have a board seat. The second is to upstage Geely and be seen as Daimler's senior-most partner in China.
Meanwhile, whether its BAIC or Geely, Daimler seemed to be serious about the Chinese market. Most recently it mentioned plans of selling more of its luxury units in the Asian country by 2020.
Troska said Friday Daimler considered China as a growth market as the demand for supercars in the country is set to skyrocket next year. Indeed, the odds are on Daimler's favors as overtook Audi in the Chinese market.
Daimler built more than 500,000 units in China this year, surpassing Audi. Troska said that they increased the production of the electric Mercedes EQC in the anticipation of the booming market.
In November, Troska announced its plans of selling the Mercedes-Maybach GLS model which is the brand's first sport-utility car in China, also in 2020. He said at the time China remains to be Mercedes-Maybach's biggest market.
