BEIJING (AP) -- Daimler AG has taken a 12% stake in its Chinese partner Beijing Automotive Group for 625 million euros ($845 million), expanding its footprint in the fast-growing China auto market.
Beijing Automotive, known as BAIC, is one of China's largest automakers and sold 1.7 million vehicles last year. Its decade-old joint venture with Daimler began producing Mercedes-Benz cars in 2006 and this year began making four- and six-cylinder engines. It also produces Auman brand medium and heavy trucks.
As part of the new arrangement, BAIC will increase its stake in production joint venture Beijing Benz Automotive Corporation from 50% to 51%. Daimler will increase its stake in their sales joint venture by the same amount to 51%.
Changes in the shareholdings of the joint ventures would not bring about substantial changes in how they're run, Daimler CEO Dieter Zetsche said at the company's Beijing headquarters.
"These numbers happily reflect the increased level of cooperation and mutual understanding this will generate for us," he said.
Around 210,000 Mercedes-Benz cars were sold in China last year, lagging behind chief competitors Audi and BMW.
Zetsche, however, said the company was growing in China faster than its luxury car rivals, largely on the strength of new models such as the highly profitable large S-Class luxury sedan.
"Things are moving in the right direction," he said.
Daimler's net profit rose 53% in the third quarter thanks to a stronger performance from Mercedes-Benz, which benefited from demand for its small cars.
China's auto market is set to expand by about 15% this year, with the premium sector expected to grow at a slightly higher rate.