Beijing Automotive Industry Holding Co., Ltd. (BAIC) confirmed Sunday that they have signed a project proposal with Daimler Chrysler AG of Germany to manufacture Mercedes-Benz C-Class and E-Class sedans in China.

The project entailing a new facility in Beijing with an initialannual production capacity of 25,000 vehicles was signed on May 3 when Chinese Premier Wen Jiabao was visiting Germany, after obtaining authorization from the Chinese National Development and Reform Commission.

"Establishing a manufacturing presence for Mercedes-Benz passenger cars in China is a key part of our Asia strategy, and further complements our activities in the Chinese market," said Juergen Schrempp, chairman of DaimlerChrysler.

The new facility will be built on the reconstruction and relocation of Beijing Jeep Corporation, Ltd. (BJC), the first joint venture for automobile production in China established in 1984 and co-operated by Beijing Automobile Industry Corporation and DaimlerChrysler.

"The newly signed agreement signifies another important achievement in foreign cooperation in Beijing's auto industry. It will lead Beijing's auto industry into a fast lane by further enlarging the auto industry's gross profits and promoting its competitive power," said An Qingheng, chairman of BAIC.

BAIC and DaimlerChrysler have a tradition of good cooperation. According to An, both sides prolonged their joint investment contract of BJC for another 30 years in 2002, and a series of new automobile models including Pajero and Outlander have been introduced to China.

In September 2003, a framework agreement of strategic cooperation was signed between the two sides, of which the newly authorized project composes the major part.

"The initial annual production capacity of 25,000 vehicles of Mercedes-Benz C-Class and E-Class sedans and their accessory engines will be put into production in the new factory of BJC in 2005," said An.

According to An, the next aim of both sides is to start cooperation in business automobiles, which "will be a great drive for the realization of Beijing's goal of its auto industry to produce and sell one million vehicles with an annual sale of 100 billion yuan (12 billion US dollars) by 2008," said An.

"Twenty years ago, we were the pioneers in China's automobile industry. In the future, our intensified involvement in China willhelp ensure that we take even better advantage of the many business opportunities in the world's fastest-growing automotive market," said Schrempp.

Source: Xinhua