Daimler May Hike Stake in BAIC Venture

December 05, 2018 at 1:41 AM

Daimler AG is pondering a move to increase its 49% stake in a carmaking venture with China’s BAIC Motor Corp. to at least 65% in 2022, sources tell Bloomberg News.

Daimler declined to comment, and BAIC denied that any talks are underway. Bloomberg’s sources describe talks between the two companies as exploratory.

China said last spring that it would ease rules that since 1994 have limited foreign ownership in carmaking ventures to 50%. The new rules took effect at the end of July for partnerships that make electric and plug-in hybrid vehicles.

Foreign carmakers won’t be permitted to hike their ownership in ventures that build commercial vehicles or conventionally powered passenger cars until 2020 and 2022, respectively.

Bloomberg notes that BMW AG was the first foreign carmaker to declare interest in acting on the new rules. The company announced in October that it will spend €3.6 billion ($4.1 billion) to raise its equity in its venture with Brilliance China Automobile Holding Ltd. in 2022 to 75% from the current 50%.