BAIC can use Mercedes platforms to build cars

STUTTGART, Germany Thu Apr 4, 2013 12:46pm BST

The logo of Mercedes Benz is seen on top of a car factory against the background of an overcast sky in the central Hungarian town of Kecskemet, 90 km (56 miles) south of Budapest January 25, 2013. REUTERS/Laszlo Balogh

The logo of Mercedes Benz is seen on top of a car factory against the background of an overcast sky in the central Hungarian town of Kecskemet, 90 km (56 miles) south of Budapest January 25, 2013.

Credit: Reuters/Laszlo Balogh

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STUTTGART, Germany (Reuters) - Chinese state-owned automaker BAIC Motor could in the future build cars off vehicle architectures used to make Mercedes-Benz luxury cars, its German partner Daimler (DAIGn.DE) said.

Daimler's Mercedes brand is heavily lagging larger peers BMW (BMWG.DE) and Audi (VOWG_p.DE) in China, and part of its strategy to close the gap included buying a 12 percent stake in its local joint venture partner for 640 million euros ($822.3 million).

"The value of our stake will continue to grow with every support that we can provide to BAIC. But there is no final decisions, whether components and platforms can be used by BAIC in the future, and if so which ones," Finance Chief Bodo Uebber told Reuters in comments published on Thursday.

Offering BAIC Motor entire vehicle platforms from which to build cars is a highly unusual move and underlines the severe difficulty both partners are facing.

BAIC plans to join listed-rivals Dongfeng Motor (0489.HK) and Geely (0175.HK) through a debut on the Hong Kong stock market, most likely sometime next year once Daimler's deal to purchase a stake has closed.

But hardly any BAIC cars can be found on the street given its own Chinese brand is very weak even when compared to domestic competitors.

The Beijing-based carmaker aims to boost volumes now through a model offensive that includes the C70G sedan, built using Saab technology it purchased during the Swedish carmaker's bankruptcy.

Mercedes for its part is far behind its German premium competitors in China. Sales sank 20 percent in the first two months to 26,829 cars.

By comparison, market leader Audi sold 67,946 cars during the same period for a gain of 16 percent.

(Reporting By Hendrik Sackmann, writing by Christiaan Hetzner; editing by Harro ten Wolde)

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