Geely buys into Mercedes-Benz’s technology

GEELY, the Chinese owner of Volvo and Lotus, has made a surprise swoop on German car-making giant Daimler at the same time as it announced closer ties with China-based BAIC.

Daimler, which owns brands including Mercedes-Benz, announced late last week that it would jointly invest $US1.9 billion ($A2.4 billion) with BAIC in modifying one of its existing Chinese plants to start building the brand’s new generation of cars, including those under its EQ electric vehicle sub-brand.

However, Li Shufu, the founder and chairman of BAIC’s rival Geely, announced on Friday that it had invested the equivalent of $US9 billion to pick up a 9.7 percent stake in the German brand in order to tap into its technology.

“Daimler AG confirms that the entrepreneur Li Shufu has acquired 9.69 percent (103,619,340 shares) of the company,” Mercedes-Benz’s owner said in a short statement to confirm the investment. “Daimler is pleased to announce that with Li Shufu it could win another long-term orientated shareholder, which is convinced by Daimler’s innovation strength, the strategy and the future potential.

“Daimler knows and appreciates Li Shufu (pictured) as an especially knowledgeable Chinese entrepreneur with clear vision for the future, with whom one can constructively discuss the change in the industry,” it said.

“Daimler has got a broad-based portfolio and footprint in China and with BAIC a strong partner on site.”

Li Shufu is expected to meet with Daimler’s board of management today, media reports said.

“The share purchase makes Li Shufu currently the single largest shareholder of Daimler AG and points to a long-term commitment,” Geely said in its statement announcing the shareholding. “For the time being neither Geely Group nor any other company in the Zheijang Geely Holding Group intend to acquire additional shares.

“Li Shufu said he will fully abide by the company charter and governance structure of Daimler AG and respect its values and culture.”

“The competitors which technologically challenge the global car industry in the 21st century are not part of the automotive industry today,” Li Shufu was quoted as saying in the release.

“But with challenges come opportunities. No current car industry player will be able to win this battle against the invaders from outside independently.

“In order to succeed and seize the technology highland, one has to have friends, partners, and alliances and adapt a new way of thinking in terms of sharing and united strength,” he said. “And we have to act now. My investment in Daimler reflects this strategic vision.”

Geely has also bought flying car maker Terrafugia.