Chinese carmaker with St. Louis ties is betting billions on global push
From the St Louis Post-Dispatch
SHANGHAI • Li Shufu, chairman of Chinese carmaker Geely, is making waves in the global auto market after buying a $9 billion stake in Germany’s Daimler AG.
Li, 54, the son of a farmer from China’s eastern Zhejiang province, has led a major acquisition push globally since 2010, when he took over Swedish car brand Volvo from Ford Motor Co in a $1.8 billion deal.
Geely is the parent company of Emerald Automotive, the Hazelwood-based electric van maker that has failed to create jobs or make vans here after borrowing $3 million from the city of Hazelwood in 2011. Hazelwood officials recently extended their loan agreement with the company, which is now called the London EV Company (USA) LLC as it remains in contention for a lucrative electric van contract from the United States Postal Service.
Over the last year, Li has snapped up a $3.3 billion stake in truck maker AB Volvo, a majority stake in sports car maker Lotus, a 49.9 percent stake in Malaysian automaker Proton and flying car start-up Terrafugia. He already owns LEVC, the maker of London’s iconic black cabs.
Li, sometimes compared to U.S. auto icon Henry Ford, founded Zhejiang Geely Holding Group in 1986, which was at the time focused on refrigerators. He moved into motorbike manufacturing in the 1990s before switching to autos in 1997.
The Daimler deal is the biggest overseas purchase yet for the business leader, who is ranked 10th on the Forbes China Rich List with a fortune of $16.5 billion.
It is also a major gamble amid what Li calls a “a battle” against foreign companies shaking up the global automotive market, namely tech firms like Tesla, Google, Uber and China’s own Baidu pushing into autonomous driving, electric vehicles and car sharing.
“No current car industry player will be able to win this battle against the invaders from outside independently,” he said in a statement announcing his Daimler stake, which makes him the largest shareholder in the owner of Mercedes-Benz.
The listed autos unit of his empire, Geely Automobile Holdings Ltd, saw its shares rise 6.5 percent on Monday after the investment was announced.
The stake gives Li a potential boost in his bid to convince the German company to share technology with Geely – an area Li sees as key to survival – even if analysts said this would still be no easy task.
“A new stage of global scientific revolution and industrial transformation is already upon us,” he wrote in a speech in December posted on his personal website. “Artificial intelligence, new energy sources and inter-connectivity are right in front of us.”
The investment could also affect Daimler’s existing joint venture in China with BAIC Motor Corp. On Monday AB Volvo said it would drop a board member because Li’s stake in Daimler created competition concerns.
Li also now plays an active political role in China and is a regular delegate to the Chinese People’s Political Consultative Conference, a largely ceremonial political advisory body.
But his political nous may have helped get the huge investment done smoothly, analysts and local media said, especially amid a fierce crackdown on overseas deals. An advance last year by Geely for a stake in Daimler was rebuffed.
The official Xinhua news agency said on Monday that Geely reflected a wider “bullish” push by local automakers overseas and the overall “rising strength of Chinese automakers”.
Li’s business ambitions appear to align with those of China’s government, which wants to strengthen the country’s high-tech expertise and leapfrog global auto rivals by becoming a leader in electric vehicles and autonomous driving.
“It strikes me as an investment that fits into an overall China strategy of getting technologies that will further (China’s) automotive strategic ambitions,” said James Chao, Asia-Pacific chief of consultancy IHS Markit Automotive.