Geely, which owns Sweden's Volvo Cars, continues to expand its portfolio of vehicle brands that includes a 49.9 per cent stake in Malaysia's Proton and a 51 per cent stake in Britain's Lotus. The pact opens up possibilities such as producing a new-energy vehicle in China, CICC analyst Wei Feng said in a note to clients. In addition, Geely also owns LEVC, makes of the iconic London black cabs.
That same year also saw Washington block a Chinese acquisition bid for German microchip maker Aixtron, warning its products could have military applications.
Speaking on the deal, Hubertus Troska, Member of the Board of Management of Daimler, said, "Local production is a strong pillar of our sustainable development in China".
He is banking on Daimler to help Geely become a leading player in electric and autonomous cars. Stick-wise, China's bringing in tougher vehicle emission rules and introducing quotas from 2019 that will require manufacturers to buy credits or face fines if they miss targets for producing zero- and low-emission cars.
"With over a decade of remarkable achievements, BBAC stands as evidence of the strong collaboration between BAIC and Daimler", said Xu Heyi, Chairman of the BAIC Group. The Geely board has since clarified that by saying 'The Board confirms that it is not aware of any reasons for these price and volume movements or of any information'.
Li, 54, is expected to meet Daimler executives in Stuttgart on Monday and hopes to meet top German officials in Berlin.
Nowadays, more and more people around the world have begun to see that Chinese entrepreneurs do have long-term visions and are serious about creating profits for all partners involved. Mercedes-Benz's unified global standards govern all production from BBAC.
"The economic advisor of the chancellor is holding as part of his role a number of talks with business representatives", a government representative said. BBAC will use Mercedes-Benz's unified global standards during the production.
Geely Chairman Li Shufu, left, and Volvo CEO Stefan Jacoby after Shufu signed the papers to take the majority interest in Volvo Cars.
Last year, China was Mercedes-Benz's largest market. BBAC makes the Mercedes C-Class, E-Class, GLA as well as GLC cars. Elsewhere, it was reported Geely was keen to access Daimler's electric car battery technology, and hoped to set up an electric car joint venture with the German auto giant in Wuhan, capital of Hubei province. The money will go to both modifying an existing BAIC production facility and building a new facility in Beijing. He appealed to the leadership of the German concern with a request to issue additional securities, however, Daimler has refused, citing a reluctance to infringe upon the rights of private shareholders.
Geely has been the most eager of China's automakers to build a major presence globally.