DAIMLER AG will slash its stake in the Denza electric-car joint venture with its Chinese partner BYD Co. following years of weak sales for the brand.

The Mercedes-Benz maker said on its company website Friday that the companies have signed an equity transfer agreement to restructure their Shenzhen Denza New Technology joint venture, also known as Daimler-BYD or Denza.

BYD will own 90 percent of the business and Daimler 10 percent after the equity transfer the companies plan to complete in mid-2022. The 50-50 joint venture was started in March 2012.

“Daimler and BYD remain dedicated to their successful long-term partnership,” Daimler said in a statement. The Denza brand will introduce new models next year and “seek further growth opportunities.”

Tepid demand for Denza cars and the venture’s weak profitability have been a concern at Daimler for years even as sales of its Mercedes luxury vehicles continued to surge in China. Daimler and BYD established the brand a decade ago to tap growth in the Chinese new-energy vehicle market.

Daimler had folded the Smart minicar brand into a joint venture with Geely Holding in China and sold the unit’s French factory to Ineos Group.

The moves are part of a strategy shift under Daimler chief executive officer Ola Kallenius to focus on luxurious cars packed with sophisticated electronic gadgetry.

BYD, which is currently boosting premium electric models to compete with Nio and Tesla, said the Denza brand will be re-positioned as a high-mid-market electric-car brand, with prices ranging from 300.000 yuan (US$47.000) to 500.000 yuan and with a focus on SUVs and crossovers. (SD-Agencies)