Geely-Daimler ties signal changes: experts

Updated 2018-03-05 13:43:03

After Chinese carmaker Zhejiang Geely Holding Group acquired a 9.7 percent stake in Germany's Daimler AG, some in Germany and other Western countries painted a picture of Chinese companies supported by the government acquiring Western technologies, but several prominent Chinese experts argued the move is about traditional vehicle groups joining forces in the face of a changing industry and rising competition.

At a panel discussion Friday in Beijing on Geely's acquiring a stake in Daimler, Chinese experts said that the global auto industry is undergoing profound changes and newcomers such as technology giant Google Inc and others pose serious competition that no traditional vehicle maker alone could mitigate.

"The international community has increasingly become a community of a shared future. Facing global economic development trends and global issues, no country can stand unscathed. This is also true for the global auto industry, as it undergoes profound changes. Rising to meet the change by joining hands and coordinating development is the only way out," Wu Yingqiu, CEO of Global Auto Media Group, said at the panel discussion his firm hosted. "Whether it's Mercedes-Benz or BMW or other traditional car companies, they cannot meet these challenges alone," he said.

While some in Germany might believe that the Chinese company is after Germany's advanced auto technologies, Geely, which has been rising in recent years both in terms of sales and technological innovation, has much to offer, according to Shui Pi, editor-in-chief of the Beijing-based China Times newspaper.

"Although [Daimler] might have strength in new-energy vehicle technologies, its understanding of the future internet society as a whole does not necessarily surpass that of Chinese companies," Shui told the panel discussion.

Shui said that Geely's move faces challenges and opposition in the West mostly because of the rise of populism in the West and cultural differences.

"Europe is even more conservative than the US, so when they encounter outside forces like Li Shufu (Geely's chairman), it is normal that there would be opposition, misunderstanding and scrutiny," he said, adding that Li would also face concerns over his acquisition of shares in a rival.

"In Germany, they would ask 'why are you buying a competitor?' But to Chinese, the question is, why not?" Shui said. "To overcome these challenges would be very difficult for Li … but I believe that these differences can be resolved by facts. After all, Geely's earlier acquisition of Volvo has been quite successful."

Wang Xiaoming, an expert at the Development Research Center of the State Council, China's cabinet, said that the Chinese auto industry has made major progress in recent years and its rise on the global stage is "natural" and has a solid base.

"In the future, Chinese companies will likely be standing at the top of the global auto industry and supporting it is our massive market force, massive demand for mobile services and driving force for technological innovation," Wang noted.

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