The Chinese carmaker Geely makes serious with the billion dollar entry into the German traditional group Daimler and becomes the largest single shareholder in one go. Geely CEO Li Shufu has secured 9.69 percent of the shares through an investment company, according to a voting rights announcement. Geely is one of the Swedish traditional brands Volvo cars. A Daimler spokesman said that any long-term investor interested in the Swabians is welcome.
According to the Bloomberg news agency, billionaire Li has been collecting stocks on the market over the past few weeks, jumping nearly 7.5 billion euros. Daimler’s market value is currently – with the Xetra closing price of the stock on Friday – at over 75 billion euros. The share price had fallen in the wake of the bad mood on the stock exchange in recent weeks from a high in January at more than 76 euros to just over 70 euros. After the announcement of the investment from China, the price of the securities rose by 1.4 percent after-hours.
For weeks it was speculated that the bustling Geely boss could plan a major entry into the Dax Group. So far, the sovereign wealth fund of Kuwait with 6.8 percent largest shareholder, the corporation does not have a real anchor shareholder.
China is the most important single market for Daimler
As a market, Daimler has had excellent experiences with China in recent years. After the Stuttgart of the competition of BMW and Audi Initially behind the world’s most important car market, among other things, they vigorously expanded their sales network and since then have benefited from dazzling growth rates in sales. China is now also the most important single market at Daimler.
At the end of last year, it became known that Geely had also become the largest shareholder of commercial vehicle manufacturer Volvo Trucks. The financial investor Cevian sold his entire share package of 8.2 percent and 15.6 percent of the voting rights to Volvo Trucks to China. Until 1999, car and truck manufacturers still belonged together, since then they only use the brand together.
The entry into Daimler will now help Geely to further the internationalization of the group. That’s what Geely was aiming for with the Volvo purchase, as it did in 2010 by the US automaker ford took over. The Swedish brand has been using the Geely entry level eight years ago so far, because Volvo was able to significantly boost its sales in the Chinese market after the deal.
China: production ratio of hybrid drives
Recently, the Chinese parent company blessed a departure from the pure combustion engine at Volvo. As the first large traditional brand, the Swedish car maker wants to produce new model series from 2019 only with electric drives, including electric cars , Hybrid engines and burners with a supporting electric motor (so-called mild hybrids) belong.
Above all, the swing at Volvo is a reaction to the new market conditions in China. There, the government has taken a number of measures to boost the sale of alternative-powered cars. In smog-hit cities like Peking and Shanghai is barely to come to new license plates for cars with gasoline engine. E-car buyers benefit greatly from government subsidies.
In addition, the government ordered a production quota in September. According to a points system, therefore, from 2019 ten percent of the produced vehicles must have a hybrid drive or a pure electric motor. For this reason, unlike most German manufacturers, Geely has a long list of vehicles with electric drives in their product range. Geely is not considered stingy when it comes to treading new ground with high investment – as with Volvo.