Daimler is close to selling a 50% stake in its Smart unit to Chinese automaker Geely, wallstreetcn.com reported, citing international wires.
The deal may be confirmed before the Shanghai Auto Show in April, the report said, without disclosing the transaction price.
While the Smart brand has been in the red for years, the move by Geely may help relieve Daimler’s struggle, it said. The Smart brand has failed to generate profits since its founding 21 years ago, an unnamed analysts was quoted as saying.
Daimler only sells about 130,000 units of Smart cars per year, however the sales volume for BMV’s Mini brand cars are about 360,000 units a year.
Geely is currently the biggest shareholder in Daimler. The Chinese carmaker built up nearly a 10% stake in Daimler in a US$9 billion deal in February 2018. The two parties also announced a joint-business to offer high-end car-pooling services in China in October 2018.
Geely also owns Volvo Cars, British sports car brand Lotus and Malaysia’s Proton, and holds a stake in truck maker Volvo Group.
In addition, BMW, as Daimler’s major competitor in luxury car market in China, has inked a joint-venture with Great Wall Motors to produce electric vehicles.