German carmaker Daimler AG will significantly cut its stake in the Denza electric-vehicle joint venture with BYD, one of China’s largest carmakers, after years of weak sales for the brand, reports Caixin. BYD will own 90% of the business and Daimler 10% after an equity transfer the companies plan to complete in mid-2022, the Mercedes-Benz maker said Friday. The 50-50 joint venture was started in March 2012.
“Daimler and BYD remain dedicated to their successful long-term partnership,” Daimler said in a statement. The Denza brand will introduce new models next year and “seek further growth opportunities.”
Tepid demand for Denza cars and the venture’s weak profitability have been a concern at Daimler for years, even as sales for its Mercedes luxury vehicles continued to surge in China. Daimler and BYD established the brand a decade ago to tap growth in the Chinese new energy vehicle market.