China's Geely becomes largest single shareholder of Daimler

Doug Carpenter
February 25, 2018

With revenue exceeding RMB 270 billion (about Dollars 43 billion) in 2017, the Zhejiang Geely Holding Group is China's largest privately owned automotive manufacturing company and one of the world's leading providers of electro-mobility.

Zhejiang Geely Holding Group, headquartered in southeastern Chinese city of Hangzhou, has bought around 9.7 percent of Daimler's stake.

It's no secret that Geely was looking to strike an alliance with Daimler the past few months over EV technologies, as the Chinese government's requirements for cleaner cars create pressure on automakers.

Daimler confirmed the holding in a regulatory filing, shortly after Bloomberg News first reported that Geely has been building up a position of just under 10 per cent through purchases in the stock market in recent weeks.

The share purchase makes Li Shufu now the single largest shareholder of Daimler AG and points to a long-term commitment.

"Daimler is pleased to announced that with Li Shufu it could win another long-term orientated shareholder", a spokesman for the Stuttgart-based group said.

Look who's about to become an automotive superpower now!

Daimler now has a joint venture with BYD in China to build electric cars. "With Mr Li and Geely, Daimler has open access to the largest market of the world", he said.

Zhejiang Geely Holding has been on an expansion drive.

Geely is based in the eastern Chinese province of Zhejiang. The Chinese company already owns Volvo Cars AB, whose refreshed line-up of vehicles have made it a popular alternative to the German luxury stalwarts. Geely Holding has also started an automotive brand, Lynk & Co, aimed at wealthier buyers. Late previous year, Geely had asked Daimler to issue additional shares so it could buy them, but that request was rebuffed.

The source said Daimler and Geely had not held concrete talks about how to structure a potential joint venture, adding: "You know we have to become a stakeholder in order to engage".

Li Shufu said,"The competitors that technologically challenge the global vehicle industry in the 21st century are not part of the automotive industry today".

Geely itself is no stranger to the European vehicle business, having bought Sweden's Volvo in 2010.

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