Daimler plans €2b China investment to meet demand

Frankfurt: Daimler plans to capitalise on burgeoning Chinese demand for its premium vehicles by investing some €2 billion (Dh10 billion) with its local partner in the production of new compact cars and engines.

The investment — part of a previous commitment to invest €3 billion in China by 2015 — was one of a series of Sino-German deals announced during a visit by Chinese premier Wen Jiabao to Berlin.

Dieter Zetsche, the chief executive of Daimler — best known for its Mercedes-Benz vehicles — said the expansion of a joint venture with local partner BAIC signalled it was "switching to attack mode" in order to profit from the country's enormous growth potential.

The joint-venture partners signed a framework agreement to produce several new compact cars, its Mercedes-Benz GLK compact SUV, and to construct an engine plant and a research and development centre. Daimler started producing Mercedes-Benz passenger cars in China in 2006.

— Financial Times