Mercedes-Benz Shifts Gears: Luxury Carmaker Ends Joint Venture with BYD in China
Mercedes-Benz Exits Joint Venture with BYD in China
German high-end carmaker Mercedes-Benz Group has withdrawn from its Chinese joint venture business with BYD, a large Chinese pure electric vehicle company. The joint venture, established in 2011, was involved in the development and production of high-end electric vehicles (EVs).
According to Mercedes-Benz, it has sold its remaining 10% stake in the joint venture to BYD, making the joint venture company a wholly owned subsidiary of BYD. The joint venture develops and produces the high-end EV “Denza”, but Mercedes-Benz has stated that “current Denza models no longer possess Mercedes-Benz technology.”
The joint venture was initially established with equal investment from BYD and Daimler (now Mercedes-Benz). However, the partnership struggled to gain traction, with sales reaching only 5,000 vehicles in 2021. In response, Mercedes-Benz reduced its investment ratio from 50% to 10% in 2021, reducing its participation in the joint venture.
After BYD took control of the operation, the joint venture’s performance improved significantly. Sales doubled to 10,000 vehicles in 2022 and increased to 128,000 vehicles in 2023, a growth rate of 26 times. The cooperation between BYD and Mercedes-Benz is now considered to be almost over.
The joint venture will continue to expand its business with the full support of BYD. It plans to launch more than 10 models, including EVs and plug-in hybrid vehicles (PHV), into the Chinese market within this year, and also plans to expand its business in overseas markets such as Europe and Australia.
Mercedes-Benz has also launched joint ventures in China with private Chinese car company Zhejiang Geely Holding Group and state-owned car company Beijing Automotive Group. The joint venture with Geely develops and produces the EV model of the small “smart” car and has begun global sales.
Reported by Lin Yingshu from Frankfurt