Geely’s Li Shufu is betting billions on global push

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Li Shufu, founder and chairman of Zhejiang Geely Holding Group. Reuters

SHANGHAI (Reuters) – Li Shufu, chairman of Chinese carmaker Geely, is making waves in the global auto market after buying a $9 billion stake in Germany’s Daimler AG.

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Mr Li, 54, the son of a farmer from China’s eastern Zhejiang province, has led a major acquisition push globally since 2010, when he took over Swedish car brand Volvo from Ford Motor Co in a $1.8 billion deal.

Over the last year, he has snapped up a $3.3 billion stake in truck maker AB Volvo, a majority stake in sports car maker Lotus, a 49.9 percent stake in Malaysian automaker Proton and flying car start-up Terrafugia. He already owns LEVC, the maker of London’s iconic black cabs.

Mr Li, sometimes compared to US auto icon Henry Ford, founded Zhejiang Geely Holding Group in 1986, which was at the time focused on refrigerators. He moved into motorbike manufacturing in the 1990s before switching to autos in 1997.

The Daimler deal is the biggest overseas purchase yet for the business leader, who is ranked 10th on the Forbes China Rich List with a fortune of $16.5 billion.

It is also a major gamble amid what Mr Li calls a “battle” against foreign companies shaking up the global automotive market, namely tech firms like Tesla, Google, Uber and China’s own Baidu pushing into autonomous driving, electric vehicles and car sharing.

“No current car industry player will be able to win this battle against the invaders from outside independently,” he said in a statement announcing his Daimler stake, which makes him the largest shareholder in the owner of Mercedes-Benz.

The listed autos unit of his empire, Geely Automobile Holdings Ltd, saw its shares rise 6.5 percent on Monday after the investment was announced.

The stake gives Mr Li a potential boost in his bid to convince the German company to share technology with Geely – an area Li sees as key to survival – even if analysts said this would still be no easy task.

“A new stage of global scientific revolution and industrial transformation is already upon us,” he wrote in a speech in December posted on his personal website. “Artificial intelligence, new energy sources and inter-connectivity are right in front of us.”

The investment could also affect Daimler’s existing joint venture in China with BAIC Motor Corp. On Monday AB Volvo said it would drop a board member because Li’s stake in Daimler created competition concerns.

Mr Li also now plays an active political role in China and is a regular delegate to the Chinese People’s Political Consultative Conference, a largely ceremonial political advisory body.

But his political nous may have helped get the huge investment done smoothly, analysts and local media said, especially amid a fierce crackdown on overseas deals. An advance last year by Geely for a stake in Daimler was rebuffed.

The official Xinhua news agency said yesterday that Geely reflected a wider “bullish” push by local automakers overseas and the overall “rising strength of Chinese automakers”.

Mr Li’s business ambitions appear to align with those of China’s government, which wants to strengthen the country’s high-tech expertise and leapfrog global auto rivals by becoming a leader in electric vehicles and autonomous driving.

“It strikes me as an investment that fits into an overall China strategy of getting technologies that will further (China’s) automotive strategic ambitions,” said James Chao, Asia-Pacific chief of consultancy IHS Markit Automotive.

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