Daimler Eyes Taking BAIC Stake

Daimler AG is considering the purchase of a stake of 10%-20% in BAIC Motor when the Beijing-based company holds its initial public offering in Hong Kong this year or next, according to news reports.

BAIC Motor, China's fifth-largest domestic carmaker, is a subsidiary of state-owned Beijing Automotive Industry Holding Co.

Bloomberg News reported late last week that BAIC has hired investment bankers Goldman Sachs Group and Morgan Stanley to advise on an IPO. The news service cited unidentified sources who say delaying the offering until 2014 would give the auto group time to restructure the car unit.

BAIC said last year it intends to raise about 10 billion yuan ($1.6 billion) to use to develop its own brand. Nearly all of BAIC's volume currently comes from joint ventures with Daimler's Mercedes-Benz Cars unit and Hyundai Motor Co.

In 2011 the Chinese company introduced its Wei Wang minivehicle and Beijing (or BC) car brands. The latter plans to make cars based on Saab Automobile's previous-generation 9-3 and 9-5 sedans. BAIC bought the technology from the Swedish carmaker in 2009.