Daimler is nearing the sale of a 50 percent stake in its small-car brand Smart to China's Geely Automobile Holdings, the Financial Times said on Tuesday, citing three people familiar with the matter.
The sale of the stake will be confirmed before the Shanghai auto show in April, FT said.
Last year, Geely built up an almost 10 percent stake in Daimler in a $9 billion bet by its chairman and became the biggest shareholder in Daimler.
On Monday, German newspaper Handelsblatt said Daimler will decide on the future of Smart by the end of this year.
Daimler is losing patience with losses at its microcar brand, the paper said.
Smart's global sales fell 4.6 percent to 128,802 last year.
Financial analysts Evercore ISI estimates Smart loses 500 million euros to 700 million euros annually.
Daimler is turning Smart into an electric urban-mobility marque selling only full-electric cars, a move which could make the brand more attractive in China, the world leader for EVs.
Daimler and Geely declined a Reuters request for comment.