Germany’s Daimler AG and its Chinese partner BAIC Motor plan to build a new factory in China for Mercedes-Benz vehicles as they seek to grab a bigger share of the high-end auto market in the country.
The automakers will jointly invest more than 11.9 billion yuan (US$1.9 billion) to build the facility, Bloomberg reports, citing a regulatory filing by BAIC on Sunday.
The Chinese automaker did not disclose the location of the new production base.
“The new factory will manufacture various Mercedes-Benz products in China including new energy electric vehicles” and improve the overall production capacity of the companies’ joint venture, Beijing Benz Automotive Co., BAIC said in its statement to the Hong Kong Stock Exchange.
The announcement came a day after Li Shufu, the founder of Zhejiang Geely Holding Group, said he had acquired a stake worth about 7.3 billion euro (US$9 billion) in Daimler, Bloomberg noted.
The 9.7 percent stake makes Geely the single largest investor in the parent of Mercedes-Benz.
Li is believed to have bought the stake in a bid to access Daimler’s technology.
The Geely chief is expected to meet Daimler executives in Stuttgart on Monday, Reuters reported, citing a source familiar with the matter.
The Chinese billionaire also hopes to meet top German government officials in Berlin.
Geely said it wants an alliance with Daimler, which is developing electric and self-driving vehicles, to respond to the challenge from new rivals such as Tesla and Uber.
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