Tue, Aug 07, 2018 - Page 10 News List

Daimler to build Smart electric cars in China

Bloomberg

Daimler AG is planning to manufacture battery-powered Smart cars in China with a local partner, according to people with direct knowledge of the matter, in a push to boost sales of the tiny-car brand in cities around the world where parking and emissions are becoming a challenge.

The German luxury-car maker is in talks to set up a new joint venture with Beijing Electric Vehicle Co (BJEV, 北京新能源汽車), a unit of its long-time Chinese partner Beijing Automotive Group Co (北京汽車), to make Smart EVs, the people said.

Daimler has been making Mercedes-Benz cars for China with the state-owned group since 2005.

The German firm bought close to a 4 percent stake in BJEV in March, a cooperation it says will allow it to “further deepen its understanding of Chinese consumers’ needs.”

The Stuttgart-based company, which in May announced changes to the top management at the Smart division in a strategy shift toward electrification, is targeting the world’s largest EV market for sales of the small two-seater.

Smart, which has racked up losses since its launch in 1998, is seeking to tap young, urban consumers in China who would potentially buy it for parking convenience.

It was not immediately clear how big a stake Daimler would want in the joint venture.

China requires foreign manufacturers to partner with local firms, with a 50 percent cap on ownership in the venture. Policymakers have been relaxing the limits — overseas EV makers can set up units on their own starting this year, while the restrictions on passenger vehicles is to end in 2022.

Besides the BAIC Group, Daimler has also teamed up with Warren Buffett-backed BYD Co (比亞迪) in China to make pure electric cars under the nameplate Denza.

Daimler in March said that it will continue to invest in Denza product development.

BJEV is also forming two joint ventures with Magna International Inc for engineering and manufacturing EVs in China. BJEV is planning to list on a Chinese stock exchange and is to start trading soon.

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