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Daimler Invests in Chinese Auto Maker

Daimler AG (DAI), the third-biggest maker of luxury cars, agreed to buy a stake in the car unit of Chinese partner Beijing Automotive Group Co. to spur efforts to catch up with competitors in the world’s largest auto market.

The parent of Mercedes-Benz will acquire 12 percent of the car division of the Chinese company, known as BAIC Motor, the Stuttgart, Germany-based manufacturer said today in a statement. The Beijing-based partner will grant Daimler two seats on the unit’s board of directors.

The investment is “significant, so that both companies can actively participate in the opportunities of the Chinese automotive market,” Daimler Chief Executive Officer Dieter Zetsche, who is also head of the Mercedes car business, said in the statement.

Zetsche has vowed to retake the top spot in worldwide luxury-vehicle sales by the end of the decade after Mercedes fell behind Bayerische Motoren Werke AG in 2005. Volkswagen AG (VOW)’s Audi unit, which has ranked second globally since 2011, also has a target of taking the luxury lead by 2020. China plays a key role in Zetsche’s strategy after Mercedes lagged behind BMW and Audi in sales growth in the country last year.

“It’s a long-term investment which secures Daimler an exclusive access to the partner,” said Christoph Stuermer, a Frankfurt-based analyst with research company IHS. The board seats will allow Daimler to have a say at the partner and start negotiating projects at an early stage, he said.

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