For weeks it has begun, now it is official. Li Shufu, boss of the Chinese automaker Geely, is with 9.69 percent the largest single shareholder at Daimler , So far, the Kuwait sovereign wealth fund was the largest shareholder with 6.8 percent, the corporation does not have a real anchor shareholder.
Lis’s long-lasting love for the traditional German company has led to success in the end. Even if he was rejected in between: An initial offer from Li to the Daimler leadership on the purchase of a block of shares rejected the Stuttgart. They recommended to the admirer coolly that he should stock up on the free market.
You could have known that Li would not be so easily diverted from his plans. The Chinese manager, it is said, dreams of a global auto-empire with many brands, represented in all markets. A giant empire like Ferdinand Piech’s Volkswagen has created. With the difference that Piech and Volkswagen were so far rather for the cast-iron design of automotive success, but Li is looking for an edge through digitalization and electrification.
He is driven by the conviction that previous core competencies in vehicle manufacturing, the construction of internal combustion engines and transmissions so, become worthless by the electric mobility. Against the attacks of new opponents like Google and Co., who can quickly assemble a car with the help of suppliers, in his opinion only helps networking among the established manufacturers. For several European brands, Volvo and Daimler He now has his fingers in the game, Lotus and London Taxi.
No unproblematic liaison
Now the question arises: what does Li intend with Daimler? And what position will Volvo take in the future? The view over the Swedish competition is likely to reassure Daimler CEO Dieter Zetsche, threatens with the journalists to sometimes rough occurring Li at least no enemy takeover with subsequent gutting of the traditional company. Artig, the Stuttgart-based company welcomes the new power at the table in a press release: “Daimler is pleased to have won with Li Shufu another long-term investor who is convinced of the innovation strength, the strategy and the future potential of Daimler Li Shufu knows and values as a Chinese entrepreneur with a special competence and future orientation, with whom one can constructively discuss industrial change. ”
Piquant for Daimler, however, should be the fact that in China already intensively cultivates two other partnerships, also to meet the quotas for electric cars there from 2019: In Beijing, Daimler operates a joint venture with the state-owned BAIC. In the south of the country, there is a cooperation with the private company and electric car specialists BYD, with which Daimler jointly produces the electric car Denza. Both cooperation partners are likely to be little built on the entry of the competitor Geely.
Especially since Li in the thrust of his commitment left no doubt: He was pleased to “accompany Daimler on its way to becoming one of the world’s leading providers of electric mobility,” said Geely CEO Li Shufu on Saturday in a statement. “Competitors who challenge us technologically in the 21st century do not come from the automotive industry,” Li said. “We need friends and partners to join forces with these” intruders from outside “. “It’s time for a new way of thinking, and my involvement with Daimler reflects that vision.”
For Daimler, Li could actually prove to be a lucky charm. And not only because “Geely” translates as “auspicious”. Against the background of exhaust gas scandal and imminent diesel driving bans, support from China could set much-needed impetus: After all, Li Volvo has already prescribed a strict fuel diet and in 2017 announced the gradual departure from the internal combustion engine at Volvo.
A star in China
Li, just 54 years old, is in China as a star. At trade fairs he is asked for autographs by other Chinese managers, including competitors. At the age of 21, he took over the management of a state-owned refrigerator factory in Hangzhou. Even that was a steep climb for the Li, born into a peasant family as the third of four children. But not enough for him.
After only two years, he reoriented himself, collecting funds from relatives and friends and founding his own company. The also built refrigerators, similar to those from Li’s first workplace. Actually, the production of such products at that time was reserved only for state-owned companies, so the authorities closed its operation. Nevertheless, Li had already become a millionaire in a short time.
The unauthorized success had only spurred him on. In his now “Geely” baptized company he made decorative materials, then motorcycles, from 1992 built “Geely Motors” cars. A licensed copy of a Daihatsu, in the early days of production, the Japanese still engine. It was not until six years later that he received a license from the government for automobile production.
Role model Volvo?
In 2017, around 1.6 million cars rolled off the assembly lines at Geely’s factories, and the manufacturer is the only Chinese automaker without government involvement. Even European testers certify a few years ago by local standards shockingly simple produced vehicles now a high quality.
This is probably also due to one of the most skilful maneuvers in the history of Chinese expansion into Europe: in 2010, Li buys himself from the Swedish manufacturer Volvo. The had belonged since 1999 to the American manufacturer Ford, the Americans, however, had never managed to drive the edged boxes out of the red. In addition, they were frustrated by the stubborn management in Sweden.
Also between Li and Volvo it was not a love at first sight. The Chinese could not do much with the cool simplicity of the cars, he worried whether the brand in China would be seen as a luxury item given the reduced design. Nevertheless, he left the headquarters in Gothenburg and the German development chief Peter Mertens and chief designer Thomas Ingenlath largely free hand.
Carefully, the design has been developed towards more shine, without appearing pretentious. Under the financial wing of Li, the problem child Volvo developed into a recognized premium brand, which has long since made big profits. But instead of siphoning off, Li continued to provide the company with fresh capital.
Mr. Li is on a shopping tour
Li is pursuing a long-term strategy in which Volvo is just one building block, albeit an important one. The platforms and engines developed by the Swedes are to become the basis for almost everything that rolls off the production lines in the Geely Group: above all, of course, the Volvos themselves, which in the future will be manufactured at a much cheaper price in China, like the Sedan Volvo S90 which is being built in China for the worldwide market. But also the Electric cars of the newly founded company Polestar , the vehicles of the Brand Lynk & Co , which wants to offer premium vehicles at the price of volume models and of course the vehicles from Geely itself.
In addition to the car division, Li has now also in the truck division of the Swedish manufacturer shopped – as well as in the London Taxi Company and the Malaysian manufacturer Proton, which now includes the British sports car manufacturer Lotus. At the heart of his strategy is Volvo and CEO Hakan Samuelsson, at least, has no doubt that it will work. “Geely can conquer the European market with cheap vehicles and say that they use Volvo technology,” says Samuelsson.
That was only in December 2017.
Editor’s note:
In an earlier version, Geely was involved in two European automakers: Volvo and Daimler. In fact, there are at least four: besides the named ones namely lotus and London taxi. Please excuse the mistake.