On December 13, Beijing Automotive Group Co., Ltd. announced that it will continue to invest in its 9.98% stake in Daimler AG in 2019 to strengthen the long-term cooperation between shareholders. The two sides fully recognize the success of long-term cooperation in the past and attach importance to future development. At the same time, Daimler Group also holds 9.55% of the shares of BAIC Group listed companies in Hong Kong, and holds 2.46% of the shares of BAIC Group in A-share listed companies. The cross-shareholding of both parties will contribute to the high-quality development and long-term success of the Chinese market.
BAIC Group and Daimler established a long-term strategic partnership as early as 2003, and in 2005, the two sides established a joint venture Tobi benz Automobile Co., Ltd. In 2013, the two sides signed the strategic cooperation project of "Beidaihe". On July 23, 2019, BAIC Group announced that it holds a 5% stake in Daimler AG.
BAIC Group said that Daimler Group is one of the most important strategic partners of BAIC Group in the world, and this increase in holdings further reflects the trust of BAIC Group in Daimler Group, and also reflects the support of BAIC Group as a long-term investor in Daimler Group and full confidence in the future potential of Mercedes-Benz.
It is worth mentioning that by the end of 2021, Mercedes-Benz will introduce a total of four pure electric models in China, including EQA, EQB, EQC and EQS. Among them, EQA, EQB and EQC have been listed, while Mercedes-Benz's pure electric flagship EQS will be launched on December 17, and the new EQE will also be domestically produced next year. In addition, under an agreement between the two sides, BAIC Group has no plans to further increase its stake in Daimler Group.
Geely has always been the largest shareholder of Daimler, and after BAIC became the third shareholder of Daimler in 2019, the market has also repeatedly reported that BAIC has raised its shares in Daimler to 10%, surpassing Geely to become Daimler's largest shareholder. Some analysts believe that BAIC strongly surpasses Geely's shareholding and is locking in to become Daimler's most senior partner in the Chinese market.
At that time, neither BAIC nor Daimler publicly responded to the matter. After two years, BAIC quietly increased its daimler shares to 9.98%, and through this increase, BAIC also surpassed Geely to become Daimler's largest shareholder.
BAIC's constant desire to expand its shareholder ownership of Daimler is also related to the performance of its brand Mercedes-Benz in the Chinese market. According to the 2020 luxury brand sales list, Mercedes-Benz's cumulative sales in the whole year were 774,382 vehicles, an increase of 11.7% year-on-year, although it was not as good as BMW, but the total amount was not much different from BMW, and even the growth rate was higher than BMW.
Of course, the increase in shareholding ratio may be based on the position of Beijing Benz in BAIC Group, and at present, Beijing Benz is the main source of profit for BAIC Group, which can be called "profit cow". According to the semi-annual report of BEIJING Motor, the total revenue in the first half of the year was 90.375 billion yuan, an increase of 16.08% year-on-year, and the net profit was 2.758 billion yuan, an increase of 163.5% year-on-year. Although the data looks very eye-catching, behind the double growth is slightly sad, because 88.059 billion yuan of these 90.375 billion yuan come from Beijing Benz, a proportion of 97.4%, while the revenue related to BAIC's own brands is only 2.316 billion yuan.
In terms of sales, the sales volume of the Beijing brand was only 28,000 units, down about 20% year-on-year; Beijing Benz's sales in the first half of the year reached 316,000 units, an increase of 17.0% year-on-year. Combined with the gross profit of Beijing Benz of 23.821 billion yuan, the gross profit of its single car is as high as 75383 yuan.
Due to Mercedes-Benz's good performance in the domestic market, when BAIC Group tried to expand its shareholding ratio in Daimler, Daimler also proposed its shareholding ratio in the joint venture with BAIC on many occasions, increasing the shareholding ratio from 49% to no less than 65%, but it was opposed by BAIC internally, and Daimler has not yet completed this goal.
However, in view of China's abolition of the foreign ownership limit for passenger cars in 2022 and the restriction on no more than two joint ventures, the brand's foreign party intends to seek to increase the shareholding ratio of the joint venture company and regain control. As the world's largest automotive market and new energy vehicle market, Daimler definitely wants to take more equity, because the more equity it holds, the corresponding profit will increase significantly. However, if Daimler gets more equity, it is not a good thing for BAIC, because the development of BAIC's own brand is not smooth, and the reduction of the holding ratio means that its profits have declined, which is why BAIC has continued to oppose Daimler's increase in shareholding in the joint venture.
At present, the development of BAIC Group is not very optimistic, it basically relies on Beijing Benz to maintain, the development of independent brands is very sluggish, including Beijing brands and BAIC New Energy are the same, if BAIC Group continues to deepen the status of the joint venture brand, ignoring the development of its own own brands, will it become the next Brilliance Group?