Geely hopes to establish a joint venture with Daimler in Wuhan

Reuters quoted informed sources as saying that Daimler AG rejected the offer of Zhejiang Geely Holding Group to acquire 5% shares because it did not want existing stocks to be diluted. The market price of 5% of the shares is about $4.5 billion.

Informed sources said that in recent weeks, at the invitation of Geely, the two automakers held talks in Beijing. However, despite Daimler's rejection of Geely's request, he welcomed Geely’s purchase of shares in the open market. It is not yet clear whether Geely is interested in this proposal.

In fact, in 2016, there were media reports that Geely Holdings intends to spend US$14.6 billion to acquire Daimler's 27% stake and become its second largest shareholder; in the future, Daimler will also share the Mercedes-Benz brand with Geely Automobile. R & D platform. However, this news was subsequently denied by Geely.

Earlier in August 2015, at the celebration of the 10th anniversary of Beijing Benz, Beijing Automotive’s chairman Xu Heyi publicly declared: “Beiqi is talking with Daimler AG about share purchases. After the success of the shares, BAIC will become Daimler’s. One of the major shareholders." But Daimler has refused to issue new shares to get rid of the concerns of existing shareholders.

Refused to acquire shares to create a joint venture

After the 5% share purchase was tragically rejected, the insider familiar with Geely broke the news that Geely's plan to form an alliance with Daimler also included the establishment of a joint venture to produce electric cars. He hopes to reach an agreement in some form in the coming weeks. .

According to sources, Geely “pitits” Daimler’s battery technology and hopes to establish an electric vehicle joint venture in Wuhan, Hubei Province.

For this report, Geely declined to comment.

Joint venture or Geely "wishful thinking"

At present, Daimler has two partners in the Chinese market - Beiqi and BYD. Daimler said that BAIC is "the most important partner in the Chinese market."

On November 17th, Daimler also announced plans to invest at least RMB 5 billion in China to upgrade the production capacity of electric vehicles and its power batteries with BAIC. At the same time, Daimler will also meet the standards for the production of China's environmental protection models for the Mercedes-Benz and Smart brands. Sales quotas help.

In 2012, Daimler and BYD also established Tengshi in accordance with a 50:50 joint venture to focus on the production of new energy vehicles. However, the development of Teng Shi is not as good as it should be, with only one model alone. However, in May of this year, BYD and Daimler respectively increased their capital by 500 million yuan to help Teng potential to ease the impact of new energy subsidies and policy adjustment, help Tengshi to stabilize its operations, and accelerate the layout of new energy fields. .

In terms of electrification, Daimler has been aggressive and has deep technical capabilities. It plans to invest more than US$10 billion in electric vehicles in the future. In addition to investing in electric vehicle manufacturing, an additional $1 billion will be spent on battery production.

Therefore, from the perspective of Daimler, it would seem unnecessary and costly to set up a joint venture in the Chinese market to produce electric vehicles.

From Geely's point of view, the situation is very different. At present, Geely's new energy market launches electric vehicles only Dihao EV, a total of three models, the product sequence is far less than the SAIC, BYD, Chery and other car prices.

At the same time, according to the data from the CCC, July's Emgrand EV sold 1,715 vehicles, a decrease of 38.3% year-on-year. From January to July this year, Dorsett EV sales were 9598 vehicles. In the domestic new energy vehicle sales list, the sales volume of Emgrand EV in July and the accumulated sales this year are both ranked second to last. Of the top five new energy car companies that sold in 2016, the last one was Zhidou, which sold 14,827 units. Geely is not known.

In fact, Geely's foundation is still weak on the basis of the new energy layout. BYD began its exploration of electric vehicles as early as 2008.

In 2015, Geely proposed the “Geely Blue Plan” and digged a new energy vehicle technical team from BYD to Geely to develop the imperial EV. In April 2016, it launched its first pure electric vehicle, Royal EV. .

Obviously, compared to Geely New Energy, the pace is indeed slow, and it can only be regarded as "overall follow-up." Therefore, in terms of new energy technology accumulation and accumulation of brand reputation, Geely New Energy is naturally weaker than its competitors.

Under a strict double-integration policy, this may be where Geely is anxious, and establishing a joint venture with Daimler to establish an electric vehicle is an extremely desirable thing.

However, whether the dream of Geely's joint venture Daimler can come true or not, let it be observed.