As part of Daimler’s bid to rise above its weakness in China (the world’s biggest auto market), it may make an investment in the passenger-car unit of its Chinese partner, BAIC Group, according to sources. Last Friday, a source said that when BAIC Motor is floated, Daimler may take a stake of 10 to 20%. It was also reported that the size of the stake depended on talks with its Chinese partner.
Last September, Xu Heyi, the chairman of state-controlled BAIC, informed Reuters that it hopes to list its passenger-car subsidiary, BAIC Motor, in 2013. The company is hoping to raise about 10 billion yuan ($1.6 billion). More sources said that BAIC Motor will be listed in Hong Kong in 2013, hitting a volume of at least $1 billion, while other sources warned that an initial public offering (IPO) may be put off until 2014.
They also claimed that the listing will be organized by Goldman Sachs and Morgan Stanley. It’s possible that a BAIC investment will help Daimler to get its struggling China business to recover. Daimler subsidiary Mercedes-Benz considers China to be its No. 3 market globally after Germany and the U.S., it still falls behind BMW and Audi in the country. Mercedes’ sluggish sales in China have caused it to fall to third place in the worldwide ranking. BMW is No. 1 while Audi is No. 2.