(Reuters) - BAIC Motor Corp Ltd's 1958.HK shares slumped as much as 13.5 percent on Wednesday following a media report saying Germany's Daimler AG DAIGn.DE was considering increasing its stake in its joint venture with the Chinese automaker.

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Daimler has shown interest in raising its holding to at least 65 percent from 49 percent, Bloomberg reported on Tuesday, citing people familiar with the matter.

BAIC denied the report when contacted by Reuters, while one analyst called such a move unlikely in the short term.

The report comes as China's government relaxes ownership rules in the world's biggest auto market. It also follows a similar move by Germany's BMW BMWG.DE, which agreed in October to buy control of a venture with Brilliance China Automotive Holdings Ltd 1114.HK for 3.6 billion euros ($4.08 billion).

Brilliance China’s shares dropped nearly 30 percent on that news, with analysts saying the deal would substantially decrease the firm’s long-term value.

“Cooperation between Daimler and BAIC is closer than that of BMW and Brilliance,” said equity analyst Patrick Yuan at Jefferies in Hong Kong.

The Daimler-BAIC venture “is less likely to see a change in the stock ratio in the short term,” Yuan said, adding that Daimler had significantly invested in BAIC, which could in turn contribute to Daimler through areas such as new-energy credits.

The venture produced 427,000 vehicles for Daimler last year, accounting for over two-thirds of the German automaker’s Chinese sales. Daimler’s China sales rose 12.7 percent in January-October versus the year prior, reaching nearly 551,000 units.

The value of the additional 16 percent stake in the venture would likely be 2.3 billion to 3 billion euros ($2.60 billion to $3.40 billion), Bloomberg reported, citing Bankhaus Lampe analyst Christian Ludwig.

Daimler on Tuesday told Reuters it was satisfied with its set-up in China and declined to comment on “speculation”.

BAIC shares fell to as low as HK$4.28 on Wednesday but recouped some losses to trade down 9 percent in the afternoon trading session. The stock has more than halved so far this year.