A First in China: Daimler Buys 12 Percent Stake in Chinese OEM BAIC Motors

This may be a landmark deal that could pave the way for similar transactions in the future: Daimler AG has become the first non-Chinese company to acquire an interest in a Chinese OEM (Original Equipment Manufacturer).

The parent company of Mercedes-Benz bought a 12-percent stake in long-standing partner BAIC Motor, the passenger car unit of Beijing Automotive Group (BAIC Group), one of the top automotive companies in China.

Daimler and BAIC Motor have been granted approval from Chinese authorities to go ahead with the deal, marking the official closing of the transaction. Daimler’s investment will take place through the issuance of new shares corresponding to a 12 percent stake in BAIC Motor. The move shows the German automaker’s strong support for BAIC Motor’s intention to launch an initial public offering (IPO) in the future.

As part of the agreement, Daimler will have two seats on the Board of Directors of BAIC Motor, to be held by Daimler AG board member for Greater China, Hubertus Troska, and Daimler AG CFO, Bodo Uebber.

Furthermore, BAIC will get a controlling stake (51 percent) in the production joint venture Beijing Benz Automotive Corporation (BBAC). At the same time, Daimler will increase its stake in the integrated sales joint venture Beijing Mercedes-Benz Sales Service Corporation (BMBS) by 1 percent to 51 percent. The latter reunites all sales and service activities for imported and locally produced Mercedes-Benz cars under one roof and is a key pillar for Mercedes-Benz’s sustainable growth in China.

BAIC Group is one of China’s largest automakers, with sales of over 1.7 million vehicles in 2012.  

By Dan Mihalascu

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Daimler Teases Denza EV, Will Debut at the 2014 Beijing Auto Show

The Auto China 2014 in Beijing will host the world premiere of the Denza electric vehicle, the first production model of the joint-venture between Daimler AG and its Chinese partner BYD.

Called Shenzhen BYD Daimler New Technology (BDNT), the JV is dedicated exclusively to electric vehicles. To prepare for the market introduction of the Denza EV, BDNT is currently carrying out intensive testing of pre-production. So far, the Denza has been tested in dusty, summer conditions in the South of China, with winter tests to begin soon in the freezing cold of north-eastern China.

The plant in Shenzhen is also running production tests in order to start building what BDNT calls “the safest and most reliable electric vehicle”, designed and engineered in China for the local market.

Previewed by a concept car at the 2012 Beijing Auto Show, the Denza EV may be based on the Mercedes-Benz B-Class Electric Drive, judging from the shape of the development prototype shown in the photo.

Following the car’s premiere in Beijing, the first Denza dealership will open in the Chinese capital by mid-2014, with further dealerships being built simultaneously in Shanghai and Shenzhen.

Three of China’s leading automobile dealership groups, Zhongsheng Group Holdings Limited (Zhongsheng Group), Lei Shing Hong Auto (China) Management Co., Ltd. (LSH), and Pangda Automobile Trade Co., Ltd. (Pangda Group), will become the first dealers responsible for the distribution and service of Denza electric vehicles, following a Memorandum of Understanding signed earlier this year.

Mercedes isn’t the only German maker to create a new brand for electric cars in China as BMW has done the same with Zinoro, which has already released its first model, the E1.

By Dan Mihalascu

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Daimler Wants to Deepen Cooperation with Tesla Motors

Daimler AG, the maker of Mercedes-Benz luxury vehicles, would like to expand its cooperation with electric car manufacturer Tesla Motors, a high-ranking Daimler executive told Reuters.

“I told my guys, go back to Tesla and look for other opportunities to work together", said Bodo Uebber, Daimler's chief financial officer. “We want to look for more cooperation,” he added.

Tesla is currently supplying electric motors and batteries to Daimler for its Smart ForTwo EV and the new Mercedes-Benz B-Class Electric Drive that will go on sale in 2014 in the U.S. and Europe. Uebber said Daimler could use more from Tesla, but didn’t provide details. Daimler AG holds a 4.3 percent stake in Tesla, which also supplies EV components to Toyota.

Maybe Mercedes-Benz is feeling the pressure from BMW’s new i sub-brand, which has rolled out two new electrified models, the i3 city car and the i8 plug-in hybrid sports car.

The B-Class Electric Drive is powered by an electric motor generating more than 100 kW (134 HP) and 310 Nm (228.6 lb-ft) of peak torque. It covers the 0 to 60 mph (96 km/h) sprint in “considerably less than 10 seconds,” according to Mercedes-Benz, and has a limited top speed of 100 mph (160 km/h). Driving range is estimated at 200 km (115 miles).

The electric B-Class can be recharged at any standard household power socket, with charging time for a range of about 60 miles (96 km) standing at less than 2 hours at 240V/40A in the USA (1.5 hours at 400V in Europe).

By Dan Mihalascu

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