German-US auto giant Daimler-Chrysler and Chinese partner Beijing Automotive Industry Holding Corp yesterday began building a new plant for their joint venture to produce Mercedes-Benz sedans.

The new plant will have an annual production capacity of 25,000 Mer-cedes-Benz E and C-Class sedans.

The production will kick off next July. The joint venture has been renamed Beijing Benz-DaimlerChrysler Automotive Co Ltd from Beijing Jeep Corp.

DaimlerChrysler and Beijing Automotive will add an investment of 143.7 million euros (US$191.1 million) to the joint venture.

Both of the two parent firms will control a 50 percent stake in the venture.

At present, DaimlerChrysler and Beijing Automotive have a 57.6 percent and 42.4 percent stake in the venture respectively.

The joint venture, established in 1984, is the first Sino-foreign vehicle joint venture and one of the biggest sports utility vehicle (SUV) producers in China.

"The Benz sedan project will significantly enhance the technical level and brand value of Beijing's automotive industry," Beijing Mayor Wang Qishan told the cornerstone ceremony of the new plant yesterday.

Visiting German Chancellor Gerhard Schroeder also attended the ceremony.

"The project lays a foundation for the car business of Mercedes-Benz and DaimlerChrysler in China, our fastest-growing market around the world," said Ruediger Grube, a board member of DaimlerChrysler.

DaimlerChrysler will also set up a joint venture with Fujian Motor Industry Corp in East China's Fujian Province and China Motor Corp from Taiwan Province to produce Mercedes-Benz vans.

DaimlerChrysler also runs a joint venture in East China's Jiangsu Province, producing Mercedes-Benz buses.

Besides collaboration with DaimlerChrysler, Beijing Automo-tive has a joint venture with the Republic of Korea's Hyundai Motor, which is making Elantra and Sonata sedans.

The Beijing venture currently is producing Chrysler's Cherokee and Jeep, and Mitsubishi Outlander and Sport SUVs.

(China Daily December 7, 2004)