German companies are some of the biggest investors in China. Some are spending tens of billions on new projects. Analysts warn of increasing risks. But for the big players, growth in China is still just too tempting. Meanwhile, the Chinese sites of German companies continue to decouple themselves from the rest of the world.
By Nico Beckert
Daimler is doubling the pace of its electric strategy. The problem: this makes the Stuttgart-based manufacturer more dependent than ever on the reliable procurement of high-quality battery cells. Can Daimler's Chinese partner Farasis deliver as promised? The company apparently has its doubts – and has now announced the construction of its own gigafactories.
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China is globally the most important market for the automotive industry. For years, Daimler and China have had close economic ties. Read all relevant and current news about Daimler in China from the China.Table editorial team.
Daimler, a German car manufacturer, sees China as its most important sales market. A study by the Center Automotive Research shows that Daimler increased its sales of new cars in China by 30.6 percent in 2020. The coronavirus pandemic also had impact on Daimler. With numerous countries still in lockdown, the automotive industry had to rely on the Chinese market. The Chinese economy had recovered rapidly from the COVID lockdowns imposed in March 2020. Thus, sales of German car manufacturers like Daimler have stabilized since and are on the rise again. Every third Daimler model is currently sold in China.
At the end of 2021, the state-owned Beijing Automotive Group (BAIC) bought a 9.98 percent stake in Daimler AG. Therefore, two Chinese companies own 20 percent of Daimler AG. The other company is the privately owned car manufacturer Geely, which owns 9.69 percent of the shares in Daimler. Thereby, BAIC and Geely are ensured chairs on the supervisory board of Daimler. However, the company denied speculations on a possible Chinese takeover, stressing that the company would instead benefit from its cooperation with BAIC.
E-mobility is the future of the automotive industry. Therefore, Daimler increasingly lays the focus on electric vehicles. The core element of any electric vehicle is its battery. Daimler itself produces the batteries needed. Daimler obtains the needed battery cells from the Chinese battery manufacturer Farasis. Farasis views Germany as a core location for its European strategy and originally planned to build a plant in Bitterfeld in 2019. However, the contract with the city of Bitterfeld was canceled in 2022.
Furthermore, in the summer of 2021, there were speculations of disputes between Daimler and Farasis, as Daimler announced that it would build its factories to produce battery cells. Nevertheless, Farasis remains strategically relevant for Daimler’s access to the Chinese market.
China.Table provides you with all the current news on Daimler in China, its strategy, Daimler's cooperation partners, and future developments in China’s automotive industry.
