The chairman of Chinese carmaker Geely has built up an almost 10 percent stake in Mercedes-Benz owner Daimler, making a $9 billion (£6.4 billion) bet that he can push through an alliance to access the German company's technology.
The purchase by Li Shufu means Geely, China's largest privately-owned automaker, is now Daimler's biggest shareholder.
Geely said on Saturday there were no plans "for the time being" to raise the stake further. Instead, it will seek to forge an alliance with Daimler, which is developing electric and self-driving vehicles, to respond to the challenge from new competitors such as Tesla, Google and Uber, which are all working on their own new technology cars.
"No current car industry player is likely to win this battle against the invaders from outside without friends. To achieve and assert technological leadership, one has to adapt a new way of thinking in terms of sharing and combining strength. My investment in Daimler reflects this vision," Li said.
Only two or three manufactures will likely survive in the auto industry going forward, a source familiar with Li's thinking told Reuters, prompting Geely to seek access to carmakers with a technological edge.
Zhejiang Geely Holding has been on an expansion drive. It owns Volvo Cars, LEVC, the maker of London's black cabs, and last year took a majority stake in sports car maker Lotus, a 49.9 percent stake in Malaysian automaker Proton, a $3.3 billion stake in Volvo Trucks and control of flying car start-up Terrafugia.
Its move on Daimler poses a challenge to the German carmaker, since Mercedes-Benz already has an industrial alliance to develop cars and trucks with Renault-Nissan, which owns a 3.1 percent stake in Daimler, and has announced plans to build electric cars with existing Chinese joint-venture partner BAIC Motor Corporation.
"It's not clear what Geely wants and how it's going to work, but we view this move as part of a broader Chinese move to gain involvement in the European automotive industry," Bernstein Research analyst Max Warburton said in a note late on Friday, shortly after the stake was disclosed in a regulatory filing.
"China wants a payback after spending a decade gifting the European auto industry super-normal growth and profits. Now it wants more direct access to technology, brands and profits."