Daimler, China's BAIC discuss cross-shareholding: CEO

DUESSELDORF: Daimler is in talks with BAIC Motor about allowing the Chinese partner to take a stake in the German carmaker although the outcome remains uncertain, Chief Executive Dieter Zetsche said on Thursday.

Daimler already owns a 10 percent stake in BAIC, the Hong-Kong listed unit of China's Beijing Automotive Group , which co-owns a joint venture to produce Mercedes-Benz passenger cars in China.

"We have said from the start that it could lead to a cross-shareholding," Zetsche told Reuters on Thursday, saying he cannot say yet whether "concrete steps" will result from the discussions.

That would be up to the potential investor, the CEO added.

A potential stake purchase by the Chinese manufacturer should be fashioned in a way that does not dilute current Daimler shareholders, Zetsche said, adding the two sides are discussing "possible mechanisms" to achieve that goal.

If talks are successful, BAIC will be the third Chinese auto maker to invest in a foreign car manufacturer, after Dongfeng Group took a stake in PSA Peugeot Citroen and SAIC Motor bought shares in General Motors.

Reuters reported last month that the Chinese manufacturer was in talks with Daimler about taking a stake in the Stuttgart-based company, citing sources.