Daimler AG has signed a deal worth one billion euros with Beijing Automotive Industry Corporation (BAIC) to expand car and engine production in China. The German company, which makes Mercedes E-Class, C-Class (pictured) and GLK models in China, says that the new agreement will double its output to 200,000 vehicles and 250,000 engines a year in 2015. Chief executive Dieter Zetsche said: “The agreement we have signed today shows once again that we are making steady progress in China, together with our longstanding partner BAIC.”

The first two months of the year saw Daimler’s sales in China increase by more than 50%, and the company plans to sell about 500,000 vehicles in China next year. Under Hubertus Troska, the new CEO of Daimler’s China operations, it established 75 new dealerships last year; it plans to add 100 more by the end of 2015.