Daimler Interested in Closer Ties With China's Geely Automotive Group

03/06/18 01:39 PM EST
By William Boston 

GENEVA -- Daimler AG Chief Executive Dieter Zetsche on Tuesday said the German car maker was interested in developing a closer relationship with China's Geely automotive group, its largest shareholder, but said any cooperation needed the backing of Daimler's current Chinese partner BAIC Motor Corp.

Speaking on the sidelines of the Geneva International Motor Show, Mr. Zetsche praised Geely's founder, billionaire Li Shufu, as a gifted entrepreneur, saying "everything he touches seems to succeed."

"It doesn't take too much imagination to see the potential upside for Daimler," he said, adding that cooperation with Mr. Li's Zhejiang Geely Holding "potentially gives us more options."

Mr. Zetsche's comments are the clearest indication yet that the maker of Mercedes-Benz automobiles could be open for closer cooperation with Geely, a fast-growing Chinese auto group that has become a global juggernaut since its 2010 acquisition of Swedish auto maker Volvo Cars.

Mr. Li disclosed last month that he had amassed a 9.7% stake in Daimler, becoming its largest single shareholder. The news rattled the Germanauto sector and the country's political leaders, who worried that the Chinese could scoop up a cornerstone of German industry.

Mr. Zetsche dismissed speculation in the German media that the company was shocked by Mr. Li's acquisition of a sizeable stake in the company. At a meeting early last year, Mr. Li told Mr. Zetsche he wanted to become a Daimler shareholder and that he saw many potential areas of cooperation.

"I said we are definitely open for anything in China. He then went out and did what he said he would do," Mr. Zetsche said, adding about Mr. Li's acquisition of Daimler shares: "We didn't necessarily expect it to be in that range but it wasn't a total surprise to us."

After disclosing his stake in Daimler, Mr. Li went to Stuttgart and met Mr. Zetsche again.

"It was a good conversation with a very successful entrepreneur," Mr. Zetsche said.

BAIC and Mercedes are building their fifth car together in China and will jointly build an electric crossover vehicle under Daimler's EQ badge, which is planned to launch in 2020.

Daimler and BAIC announced last month that they would invest $1.9 billion to build a new factory in China that will make electric cars and other vehicles.

At the meeting in Stuttgart last month, Mr. Li proposed various ways Daimler and Geely could bundle activities to share technology and development costs.

"We will examine everything if it is in keeping with the wishes of our partner," Mr. Zetsche said.

Write to William Boston at william.boston@wsj.com


(END) Dow Jones Newswires

March 06, 2018 13:39 ET (18:39 GMT)

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