Beijing Auto may block BYD-Daimler partnership
- Source: Gasgoo
- [16:50 December 08 2010]
- Comments
Beijing Automotive Industry Holding Co., Ltd.'s (BAIC) reportedly will withdraw from or delay its planned acquisition of Fujian Daimler, and this might block Daimler's partnership with BYD Co, the National Business Daily reported this week, citing a BYD source.
BYD Co., Ltd. and Daimler AG signed a contract May 27 to form a 50-50 joint venture that will develop a new green-car brand for the Chinese electric vehicle market. The JV project, which may eventually include a car-manufacturing plant, is awaiting the Chinese government's regulatory approval.
An insider from BYD said that the BYD-Daimler partnership might be obstructed by Beijing Auto's withdrawal from or delay of its planned acquisition of Fujian Daimler, as foreign automakers are allowed to have only two auto-making joint ventures in China. And Daimler now has two such Chinese ventures.
In China, Daimler has established Beijing Benz-DaimlerChrysler Automotive Co., Ltd. (Beijing Benz) and Fujian Daimler Automotive Co., Ltd. (a venture with Fujian Motors and Taiwan's China Motors). Daimler can set up a new venture with BYD only after selling its holdings in Fujian Daimler.
Earlier this month, media reported that the restructuring talks between Beijing Auto and Fujian Daimler have come to a standstill due to price disagreement and Fujian Daimler's promising market. Beijing Auto was later rumored to delay or quit its acquisition of Fujian Daimler.
