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Shares of Chinese auto group Geely Automobile Holdings Ltd. edged higher on Monday, after becoming the top major shareholder of German carmaker Daimler AG.

Geely shares gained 8 percent earlier in the day, following its announcement of building 9.7 percent or a $9 billion stake in Daimler last week. The investment is the biggest one made by a Chinese company in an overseas auto company.  

The 8 percent boost gave the Hangzhou-based firm a market value of about $30 billion. Its shares were currently up by 6.4 percent to HK$25.45, while Daimler’s was down by 0.9 percent to €69.73.

Geely shares have gained a total of 269 percent in 2017, marking a record high in November.

Geely, which is China’s biggest-private automaker by sales, has been rapidly widening its global reach. It already owns vehicle companies, including Sweden’s Volvo Cars and Britiain’s Lotus Cars, as well as black cab manufacturer LEVC.

Last year, it has bought a 49.9 percent stake in Malaysian auto group PROTON Holdings Bhd., 3.3 billion stake in Volvo Trucks, and took control of flying carmaker Terrafugia.

Geely chief executive Li Shufu is set to meet Daimler executives later in the day and German government officials this week.

Geely Seeks Access to Daimler’s Technology

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The holding not only makes Geely the biggest investor in the Mercedes-Benz owner, but it has also given the automaker significant leverage to access Daimler’s electric vehicle (EV) and autonomous driving technology.

Li stated that to succeed and obtain the technology highland, one has to have friends, partners, and alliances and adapt a new way of thinking in terms of sharing and united force.

Geely so far has no foreign automaker as its partner, while Daimler has Chinese partners, including BAIC Motor Corp. and BYD Co. Ltd.

The German government saw no need to act in terms of competition or foreign investment rules as regards the Geely-Daimler deal.

The company said that it has no plans to raise the stake further for now, but will instead aim to form an agreement with the Stuttgart-based carmaker to share its technology to keep up with the fast-changing market that is being disrupted by EVs and driverless cars.

Traditional car manufacturers are facing stronger competition from new rivals, such as US auto firm Tesla Inc., ride-hailing group Uber Technologies Inc., and Alphabet Inc.’s autonomous vehicle unit Waymo.  

Daimler and other German car companies have also been investing extremely in China to stay abreast of stricter regulations and keep their position, as the market advances from combustion engines. The country is largely deemed as the most vital future market for automakers worldwide.

Last week, Daimler and BAIC revealed their plan to invest $1.9 billion to build a factory in the country, which is expected to assemble Mercedes cars, including EVs.

China has required that 20 percent of vehicles sold by 2025 should be electric or rechargeable-hybrid models, prompting several automakers worldwide to increase their investment in the country.  

Li said he seeks to accompany Daimler in becoming the world’s leading electro-mobility provider and that he was also looking for a long-term commitment.

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