Chinese automaker BAIC Motor, partly owned by Daimler AG, plans to raise up to $2 billion (1.2 billion pounds) in a Hong Kong initial public offering this year.
Thomson Reuters publication IFR, citing sources familiar with the plans, reported on Friday that the IPO was likely in the second quarter of 2014, as the company aims to capitalize on the strong growth prospects for the world’s biggest auto market.
Goldman Sachs and Morgan Stanley have been working on the BAIC IPO since 2013. BAIC Motor has now added Citic Securities International, Deutsche Bank and HSBC to the roster of banks managing the deal after a pitching process for mandates last month, IFR said.
BAIC Motor is the passenger car unit of state-owned Beijing Automotive Group. In November, Daimler sealed a deal to buy a 12 % stake in BAIC Motor for 640 million euros to boost its China presence. Mercedes-Benz is now the smallest of the big three German luxury carmakers behind BMW and Volkswagen’s Audi because of difficulties in cracking the China market. Daimler’s rivals together dominate the global market for high-end saloons and SUVs.
China’s auto market is expected to see a second year of double-digit growth, helped by an anticipated array of economic stimulus measures and robust demand for cars in smaller cities in interior regions, according to industry executives and analysts.