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Chinese carmakers now own 15% of Germany’s Daimler

Daimler and China’s BAIC are the latest carmakers to take their relationship to the next level.

The German owner of Mercedes-Benz confirmed Tuesday that its Chinese partner, BAIC, has acquired 5% of its shares. Daimler (DDAIF) already owns 9.6% of the listed subsidiary BAIC Motor.

“This step reinforces our successful partnership and is a signal of trust in the strategy and future potential of our company,” Daimler executive Ola Källenius said in a statement.

Mercedes-Benz cars are manufactured in China via a partnership between the two companies.

China is the luxury brand’s largest market, accounting for more than a quarter of global sales in 2018.

Shares in Daimler advanced 3% on Tuesday in Frankfurt. Li Shufu, chairman of another Chinese carmaker Geely, owns 9.7% of Daimler. Other major Daimler shareholders include the Kuwait Investment Authority (6.8%), Bank of America (BAC) (5.2%) and BlackRock (BLK) (5.1%).

The BAIC investment reflects two industry priorities: Global carmakers are teaming up with Chinese rivals to improve their standing in the huge market, and they’re partnering to share the cost of developing new technologies.

Toyota (TM) announced Friday that it had signed an agreement with China’s BYD (BYDDF) to develop electric vehicles. Volkswagen (VLKAF) has paired up with Ford (F) on a similar project, and Honda (HMC) has invested in GM’s (GM) self-driving car unit.

The trend toward cooperation has accelerated as traditional carmakers come under increased pressure from upstarts like Tesla (TSLA) and tech companies including Uber (UBER) and Google (GOOGL) parent Alphabet.

Daimler has been particularly focused on partnerships.

It has joined with German rival BMW (BMWYY) on driverless and ride sharing technology. It has partnered with Geely to develop Smart brand electric vehicles for urban markets.

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