DAIMLER AG’s Chinese partner BAIC Motor Corp. said yesterday that it had purchased a 5 percent stake in the German luxury carmaker.

Daimler, which since 2013 has held a stake in a Hong Kong-listed BAIC, said it welcomed the investment.

“This step reinforces our alignment with, and strong support for, Daimler’s management and strategy,” said BAIC chairman Heyi Xu.

BAIC, backed by the Beijing Municipal Government, has acquired 2.48 percent holding and the right to buy an additional 2.52 percent stake, Daimler said yesterday. The stakes have a combined valuation of 2.5 billion euros (US$2.8 billion). Together with Daimler’s biggest shareholder — Zhejiang Geely Holding Group Co.’s billionaire owner Li Shufu — the transactions would take the level of Chinese ownership in the world’s biggest luxury carmaker to 14.7 percent.

Daimler has come under pressure from four profit warnings in just over 12 months after markets weakened and the carmaker increased provisions for charges including for fallout from investigations into alleged tampering of diesel emissions in its vehicles.

BAIC’s transaction might pave the way toward Daimler lifting its stake in the joint venture in China after restrictions for foreign investors in the world’s largest auto market eased.

For BAIC, maintaining ties with Daimler is strategically important as its joint venture with Hyundai Motor Co. has been struggling and its own domestic brands are burning cash as the trade tensions with the United States are weighing on demand for new vehicles.(SD-Agencies)