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What happened to Geely's share purchase? What are the reasons for Geely's purchase of smart equity

Daimler plans to sell a 50 per cent stake in its smartcar subsidiary to China's Geely, its largest shareholder, according to the financial times. So what happened to Geely's purchase of smart shares? What are the reasons for Geely's purchase of smart equity?

People familiar with the matter said that the negotiations between the two sides have been smooth and are expected to be confirmed before the Shanghai auto show next month.

Geely's move will also help Daimler out of trouble. At present, the German group is trying to run the loss making smart brand, which only sells 130000 vehicles a year, a small part of Mercedes Benz's 2.25 million vehicles.

Smart has not been profitable since it was founded 21 years ago, the Financial Times quoted analysts as saying. According to evercore ISI, smart is losing 500 million to 700 million euros a year.

Meanwhile, Geely has expanded rapidly in the past few years. It owns not only Volvo cars, lotus, a British sports car brand, and proton in Malaysia, but also Volvo Group, a truck maker.

In fact, as early as last October, Daimler and Geely started cooperation to set up a high-end special car travel joint venture in China, with a 50:50 shareholding ratio. They plan to provide high-end special car travel services in some cities in China.

Interestingly, as Daimler's biggest competitor in the luxury car field, BMW was the first to sign a joint venture contract with Great Wall Motor in July last year.

According to the contract, Great Wall BMW will establish a joint venture with 50% of the shares held by each party. The new company is named as beam Automobile Co., Ltd., with a registered capital of 1.7 billion yuan and a total investment of 5.1 billion yuan. The joint venture plans an international advanced vehicle factory with a standard annual production capacity of 160000 vehicles, which is also BMW's first pure electric vehicle joint venture project in the world.