The chairman of Geely the Chinese carmaker has built up a stake of nearly 10% in Daimler the owner of Mercedes Benz, making a bet of $9 billion that he will have success in pushing through an alliance so he can access the technology of the Germany company.
The stake held by Li Shufu means that Geely, the largest privately owned China based automaker is not the largest single shareholder of Daimler.
Geely on Saturday announced that it did not have any plans for now to increase its stake any further. Instead, the automaker is seeking to enter into an alliance with Daimler that will develop self-driving and electric vehicles, to respond to the many challenges from other competitors such as Tesla, Google and Uber, which all are working on technology vehicles of their own.
Only two to three manufacturers will survive in the auto industry moving forward, said one source who is familiar with the way Li thinks.
Geely Holding has increased its expansion drive. It is the owner of Volvo cares, LEVC, the black cabs of London maker, and in 2017 took a majority share in Proton the Malaysian automaker, a stake of $3.3 billion in Volvo trucks and control of Terrarfugia the flying car start up business.
Its move to buy more Daimler poses a big challenge for the Germany-based car maker since Mercedes-Benz already holds an industrial alliance for developing vehicles with Renault-Nissan, which is owner of 3.1% of Daimler, and announced plans to build new electric vehicles with existing joint venture partner in China BAIC Motor Corporation.
It is not clear what it is that Geely wants and how it would work, but the move is considered part of one that is much broader in China to gain involvement in the automotive industry of Europe, said one European based analyst.
The purchase of the stake follows an approach initially last November, when Li sought the purchase of Daimler as a way to access the technology of Mercedes Benz for electric trucks and cars.
Geely considers that there is potential in Daimler due to the fact it its developing internet connections that use high speed for autonomous cars during at a time Li says that the satellite beam may one day become more important overall for the auto industry.