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Daimler's Chinese investment: 'A step in the right direction'

Germany’s Daimler has been given the green light to buy 12 percent of Chinese partner BAIC. DW discusses the move with Stefan Bratzel from the Center of Automotive Management in Bergisch Gladbach.

DW: Daimler is the first foreign car manufacturer to acquire a stake in a state-owned Chinese automaker. A milestone?

Stefan Bratzel: It certainly is. The move underscores the huge importance of the Chinese auto industry in general and its significance for the Mercedes brand in particular. And it also shows a further strengthening of relationships among large manufacturers like Daimler that goes beyond a joint venture to partial ownership.

And does the move show what can happen when companies are prepared to go beyond a joint venture?

That remains to be seen. The Chinese government set the goal long ago to shape the many smaller automakers into a few global players that can compete globally. This clearly hasn't happened yet but the Daimler move is certainly a step in the right direction.

Daimler has been criticized for lagging behind other German automakers such as BMW and Volkswagen that operate in China. But Daimler has had its own board of directors in China for a year. Is the company now benefiting from this move?

To a certain extent, yes. Sales have been picking up since summer. But there is no denying that Daimler has had problems in the Chinese market over the years and made many wrong decisions there. Now, however, the company appears to be getting a better handle on the market. Things are looking up.

BAIC is said not to have the best reputation in China. Many consumers there prefer to buy original Mercedes. Is that a risk for Daimler?

Definitely but it's not only the problem that BAIC has but also other Chinese brands, which are often viewed as the second or even third choice of Chinese consumers. Those who can afford it buy a vehicle from a manufacturer from the West, preferably a luxury automaker like Daimler, but also from General Motors and Volkswagen. This could change gradually following Daimler's investment, provided the company can inject its professionalism into its partner. That could be a bumpy path.

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