Chinese car maker BAIC in talks to buy stake in Daimler

Beijing-based car maker BAIC is currently in negotiations with Daimler about purchasing a stake in the German luxury automaker.

Before the 2015 Frankfurt motor show kicked off this week, Dieter Zetsche, Daimler’s CEO, confirmed to Reuters that the parent of Mercedes-Benz was in talks with BAIC.

According to Zetsche, the two companies are working together to formulate a plan that would allow BAIC to buy into Daimler without diluting the stakes of current investors, although he stated that nothing had yet been set in stone.

In 2009 when Aabar Investments, one of Dubai’s sovereign investment vehicles, bought into Daimler, the German company offered new shares to existing shareholders.

At present, Daimler owns a 10 percent stake in BAIC. “We have said from the start that it could lead to a cross-shareholding,” Zetsche told the news wire.

Above: The Foton Tunland, one of the vehicles made by BAIC.

BAIC currently makes vehicles that are sold under its own brand, as well as that of its subsidiary truck and ute brand Foton. In the west, BAIC gained headlines in 2013 when it began promoting its Senova D-Series sedan, built atop the old Saab 9-5 platform, with a series of ads starring actor Nicolas Cage.

As part of the Chinese government’s system of forced joint ventures, BAIC operates factories in China with Hyundai and Daimler.

According to Reuters, the largest single shareholders in Daimler at present are Aabar Investments (6.8 percent) and the Renaultâ€"Nissan Alliance (3.1 percent).