In a bid to slash costs and drive up sales, Renschler said the firm is planning to boost local production.

In the commercial vehicle sector, the German-US auto giant already has two joint ventures in China, Yangzhou Yaxing Motor Coach Co Ltd, a coach maker in East China's Jiangsu Province, and a venture with Fujian Motor Industry Group Co and Taiwan's China Motor Corp in East China's Fujian Province.

The Fujian project, which is awaiting approval, is expected to produce Mercedes-Benz vans such as the Viano, Sprinter and Vito.

Once completed, the plant will have an annual production capacity of 40,000 vans, according to Becker.

The Stuttgart-headquartered automaker has signed a memorandum of understanding with Beiqi Foton Motor Co, an affiliate of Beijing Automotive, with which it already has a joint venture to produce Mercedes-Benz passenger cars.

It is widely believed that the German-US automaker will use the Foton tie-up as a platform to produce Mercedes-Benz heavy-duty trucks, according to industry analysts and observers.

But Renschler did not elaborate on what form this co-operation would take.

However, according to China's auto industry policy, one foreign carmaker can only form two joint ventures with Chinese partners in one auto segment, which means that DaimlerChrysler would not be able to establish joint ventures with Foton.

It is reported that the carmaker is considering selling its stake in the financially troubled Yangzhou Yaxing venture in order to pave the way for its tie-up with Foton.
But the company declined to confirm this.

Globally, the commercial vehicles business "has become a stable profit pillar for DaimlerChrysler in recent years," said Board Chairman Dieter Zetsche.

It occupies 20.4 per cent of the world's truck and bus market and 17 per cent of the global coach market.

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