The company is open to explore joint projects with Li Shufu, who has held a 9.7 percent stake since February, provided they don’t interfere with plans of its existing Chinese partners, Chief Executive Officer Dieter Zetsche said at the Stuttgart, Germany-based company’s annual meeting in Berlin. He signaled that any of these projects might be largely confined to the world’s biggest car market.
“In our future discussions of the automobile industry in China, we will be able to include our largest shareholder,” Zetsche told about 5,000 shareholders. Daimler is “open for everything in China” as long as these projects are aligned with the interests of the company’s long-time joint-venture partner BAIC Motor Corp., he said.
Since Li’s arrival, Daimler has been negotiating a delicate balance between the wishes of its biggest holder and keeping its existing network in China, the most important market for the German manufacturer’s Mercedes-Benz vehicles, on an even keel. At the same time, carmakers like Daimler are facing up to an intensifying trade spat between China and the U.S.
Daimler “shouldn’t get any ideas about replacing the Mercedes star with a Chinese dragon,” Deka Investment GmbH analyst Winfried Mathes said in a speech. “We want clarity: What role will Li Shufu play at Daimler in the future?”
Li’s presence leaves Daimler in a tricky spot on technology sharing, while potentially complicating progress toward a corporate overhaul meant to address the shift to electric and self-driving cars. Zetsche has been boxed in further by the budding trade war, which led China to propose additional fees on American car imports that would hit Mercedes sport utility vehicles being shipped in from its plant in Alabama.
Daimler’s plans announced last year to grant its individual units more independence revived speculation about a spinoff of its trucks division, the world’s biggest maker of commercial vehicles. Li’s investment won’t influence progress on the corporate changes, Chief Financial Officer Bodo Uebber told shareholders, stopping short of offering more details.
“Without a doubt it’s an unusual situation for everyone involved,” Hendrik Schmidt, a corporate governance analyst at asset management firm DWS Group GmbH, said in a speech, referring to Li’s ownership of Daimler competitor Volvo Cars and his stake in truckmaker Volvo AB.
Daimler rose 2 percent to 69.49 euros at 4:33 p.m. in Frankfurt trading, compared with a gain of 1.4 percent for BMW AG.
Underlining Li’s ambitions, his closely held Zhejiang Geely Holdings Group Co. this month presented plans to start selling its Lynk & Co. brand in Europe. He has said he sees partners and alliances as the key to defending the industry from new competitors. The entrepreneur’s holdings also include control of British sports-car maker Lotus Cars Ltd. and the iconic producer of London back cabs. Daimler already has two partners in China, BAIC and BYD Co. Ltd.
Daimler’s overhaul plans must ultimately help lift the company’s share price, Union Investment fund manager Ingo Speich said in a speech. “Heightened attention is order about any know-how transfer to China, because Geely could also be a wolf in sheep’s clothing.”
Click here for an interview with Li discussing his ambitions
German carmakers are increasingly finding themselves in the cross-hairs of worsening trade spats. U.S. President Donald Trump, unhappy with European Union tariffs, has repeatedly singled out Mercedes and BMW vehicles roaming American streets in his criticism of Germany’s lopsided trade balance with the U.S.
In another round of escalation, potential tariffs announced by China Wednesday on American car imports in retaliation to U.S. duties would have a bigger impact on Daimler and BMW than on Detroit automakers. Both German carmakers have significant production in the U.S.