FRANKFURT/MUNICH Jan 18 Daimler
wants to buy a stake in the car unit of its Chinese partner BAIC
Group this year as part of a drive to bolster its
sagging position in the country, two sources close to the plans
"The investment will come ahead of the planned IPO (initial
public offering) of BAIC Motor, and Daimler is set to be the
only automotive anchor investor," one of the people said.
BAIC is planning to take its BAIC Motor unit public in late
2013 or in 2014 and Daimler - owner of luxury marque
Mercedes-Benz - could take a stake of roughly 10 percent ahead
of that flotation, giving it greater exposure to the Chinese
market, the sources said.
"Daimler would benefit from the potential rise of the shares
in the IPO, while BAIC Motor would be able to present a strong
anchor investor, which may help attract other investors," the
China has become Mercedes-Benz's No. 3 market after the
United States and Germany, but the carmaker has fallen far short
of its two larger rivals BMW and Audi, part of
Volkswagen, in terms of vehicle sales there.
Daimler is also seeking a board seat at BAIC Motor, but
talks on the topic have not been concluded yet, the person said.
Daimler declined to comment, while BAIC, China's fifth-
largest automaker, was not immediately available.
Under partnerships with Daimler and Hyundai Motor
, BAIC makes Mercedes and Hyundai-branded cars for
sale in China and also builds the E150 small car that it sells
under its own brand.
In 2009, China overtook the United States as the world's
largest auto market by volume, but Chinese automakers still rely
heavily on locally-made foreign brands.
According to the sources, Daimler has been in talks with the
country's sovereign wealth fund China Investment Corp -
which already owns roughly 1 percent of Daimler's shares - about
a possible hike of the fund's investment.
The talks, which took place in the summer of last year, are
not ongoing currently, one of the people said.
Daimler's Chief Executive Dieter Zetsche told reporters on
the sidelines of an event in Munich on Thursday that he had only
read about the CIC topic in newspapers. "Other than that, I have
no information," he added.