BAIC Motor Corp.’s Hong Kong-listed shares slumped as much as 13.54 percent yesterday following a media report saying Germany’s Daimler AG was considering increasing its stake in its joint venture with the Chinese automaker.

Daimler has shown interest in raising its holding to at least 65 percent from 49 percent, Bloomberg reported Tuesday, citing people familiar with the matter.

BAIC denied the report, while one analyst called such a move unlikely in the short term.

Brilliance China’s shares dropped nearly 30 percent on that news, with analysts saying the deal would substantially decrease the firm’s long-term value.

“Cooperation between Daimler and BAIC is closer than that of BMW and Brilliance,” said equity analyst Patrick Yuan at Jefferies in Hong Kong.

The Daimler-BAIC venture “is less likely to see a change in the stock ratio in the short term,” Yuan said, adding that Daimler had significantly invested in BAIC, which could in turn contribute to Daimler through areas such as new energy credits.

The venture produced 427,000 vehicles for Daimler last year, accounting for over two-thirds of the German automaker’s Chinese sales. Daimler’s China sales rose 12.7 percent in the January-October period versus a year ago, reaching nearly 551,000 units.

The value of the additional 16 percent stake in the venture would likely be 2.3 billion to 3 billion euros (US$2.60 billion to US$3.40 billion), Bloomberg reported, citing Bankhaus Lampe analyst Christian Ludwig.

Daimler said Tuesday it was satisfied with its set-up in China and declined to comment on “speculation.”

BAIC shares fell to as low as HK$4.28 (55 U.S. cents) but recouped some losses to close down 11.31 percent. The stock has more than halved so far this year. (SD-Agencies)