Shanghai (ZXZC)- On December 5, BAIC Motor entered into an agreement with Daimler Greater China Ltd. (DGRC) to contribute an aggregate amount of RMB500 million to Mercedes-Benz Leasing Co., Ltd. (MBLC), in a bid to comply with the regulatory requirements of China’s Ministry of Commerce (MOFCOM).

MBLC is primarily engaged in the provision of finance leasing and leasing services in respect of automobiles under Mercedes-Benz brand to individuals and enterprises, according to the Beijing-based automaker's announcement.

（Photo source: Beijing Benz)

In accordance with MOFCOM's regulation, a financial leasing firm's risk assets shall not exceed ten times of its total net assets. BAIC Motor said MBLC's risk assets are building up and its amount of outstanding loans have increased significantly with the increase in sales volume of Mercedes-Benz-branded PVs and the enhancement in the penetration rate of financial leasing products. Hence, it is indispensable to replenish the registered capital for MBLC.

According to BAIC Motor's announcement, the capital increase will be done in proportion to both parties’ respective shareholdings in MBLC. To be specific, DGRC and BAIC Motor, representing 65% and 35% of the amount under the latest agreement, will contribute RMB325 million and RMB175 million respectively. After the transaction is closed, the registered capital of MBLC will be increased to RMB4,797,538,461.54 from RMB RMB4,297,538,461.54.

Prior to the newest agreement, BAIC Motor and DGRC had injected capital to MBLC for several times—RMB500 million for 2016, RMB900 million for 2017, RMB1.5 billion for 2018 and RMB700 million for March, 2019, according to relevant announcements.

Mercedes-Benz has defied the downward trend with its deliveries in China (excluding the volume of Smart) climbing 5.8% year on year to 583,032 units for the first ten months of 2019.

（Photo source: Zhejiang Geely Holding Group's WeChat account)

Besides, the parent Daimler is strengthening the mobility offensive in China with the premium ride-hailing platform StarRides co-built with Geely launched a few days ago. The 50-50 joint venture between Daimler Mobility AG and Geely Technology Group is based in Hangzhou, where services will be launched with a fleet of 100 vehicles including Mercedes-Benz S-Class, E-Class and V-Class vehicles. Then, it will expand to other major cities in China starting 2020.