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BAIC & Daimler into Strategic Partnership for Better Growth

2016-06-15

BAIC (stock code 1958.HK) signed a framework agreement with Daimler AG, under which both parties will increase 4 billion-Yuan investment (over 500 million Euros) to expand engine factory of Beijing Benz.

Party Secretary & Chairman Xu Heyi (right) of BAIC Group & BAIC Motor and Hubertus Troska, Member of Daimler AG Board of Directors and Principal of Daimler AG Greater China Daimler AG signed the agreement and shook hands in front of the two national presidents.

On June 12, one day before the signing ceremony, BAIC Motor Corporation and Fujian Motor Industry Group Co. held the ceremony to sign the agreement on equity transfer. BAIC Motor took 35% equity of Fujian Benz held by Fujian Motor Industry Group. Both parties, together, will hold 50% equity of Fujian Benz. In partnership with Daimler AG, they will push forward continuous development of Fujian Benz.

As these two projects move on, we are seeing more results of strategic partnership between BAIC Group and Daimler AG from Germany.

BAIC & Daimler Partnership Kicked off a Brand-new Partnership Model of JVs in China

BAIC and Daimler started their cooperation more than 10 years ago. In 2005, Beijing Benz-Daimler Chrysler Automotive Co., Ltd.(BBDC) was established. In January 2010, the company changed its name to Beijing Benz Automotive Co., Ltd. BAIC and Daimler AG initiated the Partnership stage 1.0 in which they focus on production technologies, introduction of advanced Germany techniques and management process while providing high-quality products for the Chinese consumers.

After that, with the development of the industrial system, BAIC Group and Daimler AG signed a package of agreements on production and sales while concentrating on product R&D, supply chain building, warehousing & transport and sales service, kicking off the China-Germany cooperation era 2.0, which focuses on the entire industrial chain. While introducing and digesting the core technologies and advanced manufacturing techniques of automobiles of Mercedes-Benz, Beijing Benz has also introduced core manufacturing technologies of Mercedes-Benz engines.

Beijing Benz has been included into the global procurement supply chain system of Daimler AG. Its engine manufacturing technique and product quality have reached global standard of Daimler. Holding the Mercedes-Benz brand philosophy of “Best or Nothing”, Beijing Benz has established the same quality management system as that of Daimler.


In February 2013, BAIC Group and Daimler AG signed the agreement of strategic partnership in Stuttgart of Germany. Daimler became a shareholder of BAIC Motor Corporation. In the photo, BAIC Group Chairman Xu Heyi (right) was shaking hands with Dieter Zetsche (left), Chairman of Daimler AG

Technical cooperation improves quality, cooperation in inBAIC Group & Germany partnership stage 3.0 focuses on capital. On one hand, BAIC is active to go out and become a shareholder of multinational to participate in international duty division. On the other hand, it is also introducing the international capital and boosting corporate development. In 2013, Daimler became a shareholder of BAIC Motor Corporation. While bringing in the platform for technological development, it also has deepened their cooperation and appreciated the capital market. As the BAIC & Daimler partnership becomes a reality, BAIC Group and Daimler AG have entered the new stage of cooperation ranging from products to technologies and strategies. Starting with this, Beijing Benz has embracing rapid expansion, including Mercedes-Benz Auto Engine Factory, which is the first such factory of Daimler beyond Germany, the largest R&D center of JVs of Daimler AG, and the most advanced Daimler FWD auto factory have been built in Beijing, making Beijing Benz the sole JV of Daimler in the world that has 3 platforms of FWD cars, RWD cars and powertrain.

Dustrial chain upgrades efficiency, and capital starts the deeper cooperation. BAIC Group will focus on the theme of innovations while making arrangements in new energy and light-weight development to make breakthroughs. Till today, BAIC Group has established innovation centers in Aachen of Germany and Silicon Valley of USA. It also has recruited famous German experts in light-weight technologies, and established JV of advanced electric motors with Siemens. In the future, BAIC will keep investing in such fields as connected vehicles, unmanned driving, big data, intelligent manufacturing and other fields of innovation, thus kicking off the Innovation Partnership stage 4.0 that is full of hopes.

Pacesetter of Limousine Brand in the Chinese Auto Market

In the recently-released list of Top 30 Chinese Automakers for 2015, BAIC Group ranked No. 4 with its operating revenues at RMB 345.2 billion in 2015. In the 12th five-year Plan period, BAIC Group continued to move forward and achieve results capturing world attention. It has created the most exceptional BAIC Speed. In a 3rd year in a row, BAIC has been listed in Fortune Top 500. And Beijing Benz has a contributed a lot to these achievements.

In 2015, Beijing Benz both produced and sold more than 250,000 units with its annual operating revenues rising considerably by 50.8% YOY. Since 2016, market growth rate of Beijing Benz has exceeded 40%, making Beijing Benz leading JV brand in the Chinese auto market. The outstanding performance has instilled robust power into BAIC Group, thus becoming the stabilizer of growth in BAIC Group.

In its 13th five-year Plan, BAIC Group has made the strategic goal of “producing and selling 4.5 million units on an annual basis by 2020 with operating revenues reaching 600 billion Yuan”. BAIC & Daimler partnership will play an important role in this process. In the 13th five-year Plan period, Beijing Benz will work hard to become a benchmark manufacturer of limousines. It will enhance R&D capacity building and become the leading limousine manufacturer in the Chinese auto market.

According to Chairman Xu Heyi of BAIC Group, Beijing Benz is a window showcasing China-Germany cooperation. BAIC & Daimler partnership starts a brand-new model of JVs in China and functions as a model for innovation, transformation and upgrading of Chinese manufacturing industry represented by auto industry. It will also become an important impetus for lead-forward development of BAIC in the 13th five-year Plan period.

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