By Kane Wu and Julie Zhu
HONG KONG (Reuters) - Daimler has asked Goldman Sachs (NYSE:GS) to help it explore increasing its stake in Chinese carmaker BAIC Motor Corp, its main China joint venture partner, two people with knowledge of the matter said.
A deal would be only the second since the world's biggest auto market relaxed foreign ownership rules last year.
Daimler's rival BMW became the first to take advantage of the changes when it agreed in October to buy control of its venture with Brilliance China Automotive Holdings Ltd for 3.6 billion euros ($4.08 billion).
Caps on foreign ownership previously prevented overseas carmakers from controlling any Chinese maker or joint venture with foreign peers. Last year those limits were removed for firms making fully electric and plug-in hybrid vehicles, which will be followed in 2020 by the removal of limits on makers of commercial vehicles such as trucks and buses.
In 2022, the limits will be lifted on the wider car market. BMW's deal with Brilliance China will only take effect then.
Daimler's discussions with BAIC are at an early stage and its plan to increase the stake in BAIC's Hong Kong-listed entity has not been finalised and could change later, cautioned the people, who declined to be identified as the information is confidential.
Daimler holds 30.4 percent of BAIC's Hong Kong-listed shares, representing a 9.55 percent overall stake in its Chinese partner, according to BAIC's June 2018 interim report.
State-owned BAIC Group and steel giant Beijing Shougang owns 42.6 percent and 12.8 percent of BAIC through its non-tradable domestic shares, respectively.
It is not clear whether Daimler would seek a majority stake in BAIC, which has a current market capitalisation of $4.9 billion.
Daimler declined to comment on speculation about its partnerships. Beijing-based BAIC did not respond to a request for comments. Goldman declined to comment.
Daimler owns 49 percent in Beijing Benz Automotive Co, its main JV with BAIC, as well as a 3.93 percent stake in Beijing Electric Vehicle Co., a subsidiary of BAIC. It also has a smaller JV with new energy vehicle maker BYD.
It is also setting up a ride-hailing JV in China with Geely Group, Reuters reported in October. Geely bought a 9.69 percent stake in Daimler in early 2018 and demanded an alliance.
Daimler sold 653,000 cars in China last year, its biggest sales market in the world.
Two separate people with knowledge of the matter said Daimler would still like to raise its 49 percent stake in Beijing Benz Automotive. It held talks with BAIC last year but those petered out earlier this year, said one of them.
BAIC denied a Bloomberg report in early December that Daimler had raised the prospect of increasing its stake in Beijing Benz to at least 65 percent.