Daimler is approaching a deal with Geely for the sale of a 50% stake in its small-car brand, Smart, to the Chinese automaker, Financial Times has reported. The sale of the stake will be confirmed ahead of the Shanghai Auto Show next month, one of the people familiar with the plan said to the news outlet.
Geely became Daimler’s single largest stakeholder when it purchased a 9.69% share in the German automotive group last February. More recently in October, the two companies announced a ride-hailing joint venture in China.
Daimler has been in talks with ‘several possible co-operation partners’ as it works on the next-generation of Smart models, Financial Times reported, though a Geely spokesperson declined to comment. The stake purchase could be in aid of the German marque’s small-car firm, which sells only 130,000 cars annually compared to 2.25 million units that Mercedes-Benz sells a year, the report said.
Daimler chief executive officer Dieter Zetsche has been slated to step down from his post this year, which puts Smart in a less-than-secure position within the company. Zetsche has been a champion for the compact car sub-brand while his successor, Ola Kallenius is thought to be less enthusiastic about it, the report notes, particularly as Daimler profits have come under pressure last year.
Earnings figures by Smart have not been released, however analysts think that the compact car brand has failed to generate profit since its founding 21 years ago, the report notes. Estimates from Evercore ISI charts Smart as losing between 500 million euros (RM2.29 billion) and 700 million euros (RM3.21 billion) each year, Financial Times said.
A partial sale to Geely could, however, face political opposition in Berlin as Germany has voiced concern about Chinese companies’ growing influence on businesses in Germany, which is the largest economy in Europe, a banker close to Daimler was quoted as saying.
Following Geely’s stake purchase in Daimler, a draft law was approved to enable the German government to block investments larger than 15% by non-European Union companies in sensitive industries, ranging from defence to energy, the report said, adding that several European capitals are concerned about the potential for technology transfer to China following the acquisition of assets in the EU.
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Really hope China can take part in more of our country project like MAS, they really make things great
Smart was the one of the pioneers on EV in continental Europe, seems like EV sales is not encouraging enough.
Geely has done so well. They know how to buy up crp loss making companies and turn it around. I don’t know how they do it. Geely started in 1997.
Proton started in 1985. Proton is older and should have more knowledge than Geely
Somemore, Proton had world markets to explore. China was open to Proton to market their cars there 20 years ago.
Infact, Proton had an advantage, They had Global and Eupean markets to market their car whilst Geely had only China market to market Geely
What is their secret? The secret is HARD WORK. They work hard. Then they buy lazy companies like Proton and Smart and make their workers work hard.
Wow, Geely engineers and executives are hardworking. They don’t have lepak lepak attitude
No wonder they are so successful, even if they are young.
Weren’t you telling us the 10% shares held by Geely is useless? Looks like either you were lying to us or your knowledge was too shallow to know that 10% single major shareholding would enabled Geely to buyout SMART.
Those who say Geely have no power in Mesidis, u can now see the Empire is firmly moving into the organisation. Now Geely will rescue SMART from poor German management. Together these separate companies are synergising towards a common goal. Geely will make Smart great again. Tahniah!
Geely, P1, Mesidis, SMART, VolvoCar, VolvoTrucks, Lotus, L&C, Polestar > all
21 years & still in the red ???
It’s ok. Proton over 30 years also still in the red. Still the champion.
Don’t be stupid, Geely. The Germans are selling you junk to cut losses. They want to teach you a lesson for buying Mercedes majority share.
Geely is going to make Smart great and profitable, mark my words.
I can think of a few ways to make things happen, Geely decision-makerss are collectively cleverer than me.
Then Geely will teach the Germans how to run it profitably, their track records say it all!
Germans are SMART…..they will only sell to the civilized….
Germans only good at technology. But the Chinese good at running business. That’s how things work.
Yes!! after buy please put at proton product line up!!
Geely will soon owns the world of automobile, same as how Huawei going to dominate the Telecommunication industry