BAIC might be allowed by Mercedes-Benz to use its vehicle platforms

Article by Christian Andrei, on April 10, 2013

Chinese state-owned automaker BAIC Motor may be allowed by its foreign-based partner Mercedes-Benz to use the German automakers’ architectures in building its premium vehicles, according to parent company Daimler. Mercedes has fallen behind bigger rivals BMW and Audi in China. Mercedes intends to narrow this gap by purchasing a 12% stake in its local joint venture partner for 640 million euros ($822.3 million).

Last Thursday, Finance Chief Bodo Uebber said that the value of its stake will continue to increase every time that it gives support to BAIC. However, he clarified that there’s no final decision yet on whether BAIC can use components and platforms in the future. He also said that the company still has to determine which parts BAIC can use.

It would be a very unexpected move for BAIC to be permitted to use Mercedes-Benz’s entire vehicle platforms. This is actually a very tough decision. BAIC intends to join listed competitors Dongfeng Motor and Geely via its debut on the Hong Kong stock market, most probably in 2014, as soon as Daimler's deal to buy a stake has closed.

BAIC, which falls behind other China-base automakers in sales, seeks to increase volumes by pushing a model offensive that includes the launch of the C70G sedan, which was built with Saab technology bought during its bankruptcy.

Mercedes has also been lagging in China, compared to other German automakers. Its sales have fallen by 20% in January and February of 2013 to 26,829 cars. On the other hand, market leader Audi sold 15% more vehicles in the same period to 67,946 cars.

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