Why We Might All Soon Be Driving Chinese Cars Without Even Knowing It

Wed 28th Feb 2018

The motor world will be watching with interest as to the latest developments in the car market following the $9bn investment from Chinese carmaker Geely into Mercedes-Benz owners, Daimler.

Geely already fully owns Sweden’s Volvo and the company that makes black cabs, London Taxi Company and with a 9.7% stake in Daimler they are now the biggest investor in the German group.

The Chinese firm is hoping to work together on electric cars for the German car giant, though there are worries that the investment could be used as a “gateway” for Chinese economic interests. The move is the latest big move from Chinese firms into big European brands and some are suggesting it is part of a bigger plan to increase China’s access to Europe’s technology and innovation base.

Speaking to German newspaper Handelsblatt, Germany’s Economy Minister Brigitte Zypries said Germany must “keep an especially watchful eye,” but that the country is “an open economy that welcomes investments, as long as they happen in line with the market.”

Some economists have suggested that whilst European markets are open to investments from countries on a global basis, the same is not true of the Chinese economy, with strict rules on who can invest in China’s biggest companies.

China is the fastest growing market for car manufacturers in the world and just last week, Daimler made their own investment in a Chinese firm, BAIC. The $1.9bn investment will go towards modernising the BAIC plant to build Mercedes cars, with the focus likely to be on electric vehicles.

It’s been a busy time for deals between Germany and China. BMW also announced last week that they had signed a partnership with Chinese manufacturer Great Wall Motor to build electric-powered Mini cars in China.

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