Daimler broke with its tradition of producing engines solely at home by building a 400-million-euro ($540 million) facility in Beijing which was officially opened on Monday.

The German auto maker said it intended to produce some 250,000 four and six-cylinder engines at the plant annually to be used in Mercedes-Benz vehicles made on the ground in China.

Daimler's China chief, Hubertus Troska, expressed confidence his company could regain some ground lost previously to its luxury car rivals BMW and Audi. He said Mercedes boasted a growth rate of between 8 and nine percent on the Chinese market currently, adding the investment in the engine plant "demonstrated the company's faith in a bright future in China."

Big ambitions

Since 2006, Daimler had been cooperating with China's state-owned carmaker BAIC, jointly producing vehicle for the domestic market. Mercedes said about 100,000 units rolled off the assembly lines in China last year.

Earlier this year, Daimler acquired a 12-percent stake in BAIC, with pending approval from Chinese authorities. The German auto maker announced it intended to sign an agreement on large-scale and long-term strategic cooperation with its Chinese partner.

"We'll never again be able to live separate lives," BAIC chief Xu Heyi was quoted as saying in Beijing during the opening ceremony of the engine plant.

hg/dr (dpa, Reuters, AFP)