Geely, the Chinese company that has just become the largest shareholder of the automotive giant Mercedes-Benz (and that worries Germany)

Geely, the Chinese company that has just become the largest shareholder of the automotive giant Mercedes-Benz (and that worries Germany)

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It is unlikely in the 20s of the last century Karl Benz and Gottlieb Daimler imagined that a Chinese company would end up buying the traditional German company Mercedes-Benz.

But that is exactly what has just happened. The Chinese manufacturer Geely became this Friday the largest investor of the company Daimler, owner of Mercedes-Benz.

Geely, which already owned the Swedish Volvo and the English London Taxi Company, invested US $ 9,000 million in the operation, acquiring a 9.7% shareholding.

But the business did not occur without controversy.

After a growing concern that Chinese companies could have too much influence in European economies, the German government intervened in the debate.

An employee looks at a vehicle in the process of being assembled at the Geely plant in Cixi, in the Chinese province of Zhejiang, on June 21, 2012.
Copyright of the REUTERS image
Logo of a Geely car.
Copyright of the REUTERS imageImage caption Geely cars are known within Chinese borders, but not abroad.

He said he would not block the purchase of Daimler’s share package, but at the same time, Economy Minister Brigitte Zypries said they should “have a watchful eye” .

“Germany is an open economy that welcomes investments,” Zypries said in an interview with the German newspaper Handelsblatt .

But he warned that this opening “should not be used as a gateway to favor the interests of the industrial policies of other countries.”

The gigantic investment has generated anxiety in Germany because, critics say, China would be looking for access to technological advances and innovationsthat have been developed in Germany.

Another aspect that has generated some concern is that Europe is much more open to foreign capital than China regarding foreign investments.

“The invaders”

China is considered the most important future market of the automotive industry.

In fact, Geely has said his plan is “to accompany Daimler on the road to becoming the world leader in the electric car market .”

Mercedes-Benz car
Copyright of the GETTY IMAGES imageImage caption For almost a century Mercedes-Benz has been recognized as one of the traditionally “German” companies.

The company’s position is that companies that have traditionally dominated the production of cars should cooperate through alliances to deal with the emergence of external competitors such as Tesla and Waymo (company associated with Google), described by Geely as “the invaders “

In a parallel operation, Daimler announced that it will invest US $ 1,900 million in a new alliance with another Chinese company in the automotive sector called Baic, with the objective of modernizing its plants and adapting them to build electric Mercedes.

The two firms, Daimler and Baic, have been working together in the Chinese market , where foreign production is only allowed under a partnership system with a local firm.

Everything indicates that the automotive industry is moving fast. Last week, the German manufacturer BMW announced an agreement with the Chinese company Great Wall Motor to manufacture electric cars Mini in China, with the aim of selling them in the local market.

These alliances occur when the Chinese government has announced that 20% of the cars sold in 2025 should be electric or hybrid rechargeable, an objective that has stimulated new investments of foreign companies in that country and that is accelerating the race to dominate some of the markets most coveted of the next years.

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