China: Daimler Reduces Its Share In Denza JV With BYD

Under BYD, Denza intends to launch new models in 2022.

By: Mark Kane

Dec 31, 2021 at 6:38am ET

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Daimler and BYD announced that they have signed an equity transfer agreement to realign the structural setup of their joint venture Denza.

The Chinese luxury electric brand has struggled over the years with weak sales and for quite some time it was clear that changes were coming. German newspaper Handelsblatt (via Electrive), said at the time that only some 14,000 cars were sold cumulatively (from 2014 to early 2021) and it was a "disaster" with heavy losses.

Daimler and BYD launched the 50:50 research and technology joint venture BYD Daimler New Technology Co., Ltd. (BDNT) in 2010. In 2012, the Shenzhen DENZA New Energy Automotive Co., Ltd. (DENZA) joint venture introduced the all-electric Denza model (the first and only), which was launched in 2014.

According to the agreement, "both partners intend to complete an equity transfer in Denza" by mid-2022, which will result in new equity interest: 90% for BYD and only 10% for Daimler.

"Daimler Greater China Ltd. (Daimler) and its long-term Chinese partner BYD Auto Industry Co., Ltd. (BYD) signed an equity transfer agreement to realign the structural setup of their joint venture Shenzhen DENZA New Energy Automotive Co., Ltd. (DENZA). Both partners intend to complete an equity transfer in DENZA. Following the equity transfer, Daimler will hold an equity interest of 10% and BYD will hold 90% equity interest"

The German company says that it "stays committed as a shareholder," but it appears as a withdrawal to focus on the Mercedes-Benz brand.

Meanwhile, BYD - which notes huge plug-in car sales increases in recent months - will further invest in Denza and will launch new models in 2022.

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"Daimler and BYD aim to accelerate the development of DENZA in China’s fast-growing NEV market. In 2022, DENZA will introduce new models to the Chinese market and seek further growth opportunities. The DENZA operation team will ensure that existing customers continue to enjoy relevant customer services."

It's an interesting move, as BYD was rumored to launch a premium brand in China.