Privately-owned Chinese automobile company Zhejiang Geely Holding Group, or Geely, has made a $9 billion investment in Daimler. This adds up to an approx. 10% stake, making Geely the largest shareholder of Daimler.
Geely is looking to forge a technology-sharing partnership with the Mercedes-Benz parent, to deal with competitors including Tesla and Google in an industry that is increasingly focusing on electric, autonomous and even flying vehicles.
Daimler has already announced plans to produce electric cars with its Chinese JV partner BAIC Motor Corporation, and it has also forged an alliance with Renault-Nissan.
With the increasing crackdown on pollution and fossil fuels, prospects for traditional automobiles are dwindling. Only the automakers who are willing to invest resources in new and innovative technologies are likely to survive. Many automobile firms are therefore, looking for new friends to hold hands as they walk down this unfamiliar path. Geely is no different, as is evident from its purchase of Terrafugia, a flying car start-up.
Daimler has already announced plans to produce electric cars with its Chinese JV partner BAIC Motor Corporation, and it has also forged an alliance with Renault-Nissan. It is likely that Geely’s attempt to join the gang could put Daimler in an uncomfortable position.
Swedish company AB Volvo, one of Geely’s partners, is also said to have raised anti-trust concerns in relation to Geely’s current move on Daimler.
Geely’s shares, meanwhile, have seen a climb after the investment announcement.