Geely Auto Group, a subsidiary of Zhejiang Geely Holding Group, is set to relocate its headquarters to Ningbo, East China's Zhejiang province. [Photo/cnnb.com.cn]

Geely Auto Group, a subsidiary of Zhejiang Geely Holding Group, will relocate its headquarters to Ningbo, East China's Zhejiang province, according to local media reports.

The group sells vehicles under Geely brand and  holds a 50 percent stake in the LYNK & CO brand.

Zhejiang Geely Holding Group, one of the largest carmakers in China, will also set up a 50-50 joint venture with the German car company Daimler AG in Ningbo as part of efforts to develop and produce electric vehicles for global markets.

The 5.4 billion yuan ($778 million) joint venture is expected to help the "smart" brand under the German carmaker develop into a leader in premium electric vehicles. By 2022, China is expected to be the sole producer of smart-branded electric vehicles.

Zheng Shanjie, Party secretary of the CPC Ningbo Municipal Committee, pointed out that Geely's move to reloate headquarters of Geely Auto and establish the joint venture will boost the growth of the auto industry in Ningbo and pledged that the local government will continue to support Geely's development in the city.

Geely Chairman Li Shufu said that the choice of Ningbo is largely because of its congenial business climate and strong development prospects.

He added that Ningbo is where Geely first started operations, and the city will become the company's strategic base in the future.

The auto company reported delivery of 2.15 million vehicles in 2018, up 18.3 percent year-on-year. The figure more than doubled that of 2015, which stood at roughly 1 million.

Geely has been spending heavily to improve its competitive edge. Its research and development expenses in 2018 totaled 21 billion yuan, accounting for 6.4 percent of the group's total revenue that year.