BERLIN -- Daimler has agreed to discuss possible fields of cooperation in China with Geely Chairman Li Shufu, who is the German automaker's largest shareholder.
In comments to the 6,000 shareholders gathered in Berlin for Daimler's annual meeting on Thursday, CEO Dieter Zetsche said: "So far our talks with Li Shufu have been very positive. He wants his investment in Daimler to be a long-term one and he supports our successful strategy."
"China is our most important market. In our future discussions of the automobile business in China, we will be able to include our largest shareholder,” Zetsche said.
He reaffirmed his condition that any cooperation would have to be supported by Daimler's long-standing Chinese joint venture partner, the state-owned Beijing manufacturer BAIC.
Zetsche said he was "open for everything" that served BAIC's interests. "The bottom line is Li Shufu's stakeholding offers many new chances," he said.
Li was not present to hear the Daimler CEO's speech personally and his shares will be represented by proxy.
Since the Chinese automotive tycoon and owner of Volvo Cars told Daimler that he had amassed a 9.7 percent stake, worth nearly 7.1 billion euros ($8.6 billion), Daimler has been negotiating a delicate balance between the wishes of its new shareholder and its existing partners in China.
Li, whose Zhejiang Geely Holdings Group this month presented plans to start selling its Lynk & CO brand in Europe, has flagged he sees partners and alliances as the key to defending the industry from new competitors.
Daimler posted annual record deliveries and earnings last year but is facing up to intense spending pressures as the shift to electric vehicles takes shape.
China trade worries
At the same time, German automakers including Daimler are increasingly finding themselves in the cross-hairs of worsening trade spats.
U.S. President Donald Trump, unhappy with European Union tariffs, has repeatedly singled out Mercedes and BMW vehicles roaming American streets in his criticism of Germany’s lopsided trade balance with the U.S.
In another round of escalation, potential tariffs announced by China Wednesday on American car imports in retaliation to U.S. duties would have a bigger impact on Daimler and BMW than on Detroit automakers.
Both German carmakers have significant production in the U.S. BMW, from its plant in Spartanburg, South Carolina, and Daimler, which has a plant in Vance, Alabama, will ship just over 100,000 vehicles to China from the U.S. this year, according to Evercore ISI estimates -- almost $7 billion worth of goods.
Zetsche didn’t comment on the potential fallout of a possible trade war between China and the U.S., Daimler’s two largest markets.
Daimler has issued a muted forecast for profit growth this year, even as Mercedes sales continue to extend their lead over rival BMW. Responding to the shifts in the industry, Daimler last year announced plans to grant its individual units more independence, reviving speculation about a spin-off of its trucks division, the world’s biggest maker of commercial vehicles.
Granting its individual units more leeway to take their own decisions would make parent Daimler more agile and competitive, Zetsche said. “It increases our clout and makes us even more attractive for investors and partners,” he said.
Bloomberg contributed to this report