German automobile manufacturer Daimler have agreed to invest close to $2 billion in the modernisation of a factory in China, Reuters reports, in a joint project with Chinese partner BAIC.
The updated, state-of-the-art facility will build Mercedes-Benz cars, including electric vehicles, representatives of Beijing-based BAIC told the Hong Stock Exchange over the weekend.
The announcement of the plans coincides with a surprise purchase on Friday of a 10% share in Daimler by BAIC’s rival car manufacturer, Chinese company Geely, which may put pose a compromise to Daimler’s existing business partnerships.
Despite speculation that Geely’s swoop will warrant government attention, Berlin has denied the need to take any action. “It is a company decision,” a government spokesman said. “Due to the character of the investment as a minority stake, there is no need to act.”
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