Daimler AG and its partner BAIC Motor Corporation have signed an agreement to build further Mercedes-Benz compact car models beyond the GLA-Class in China.

The additional compact car models will be built by the Beijing Benz Automotive Co (BBAC) joint venture, in which Daimler and BAIC Motor will invest a total of around €4 billion ($5.12 million) by 2015, including the pledge of €1 billion ($1.27 million) for the localization of additional Mercedes-Benz compact car models. Mercedes-Benz didn’t say which compact models will be built in China alongside the GLA-Class.

Production of the GLA-Class will begin early next year, with the crossover being Mercedes-Benz’s first locally produced compact car model. The GLA will be produced at BBAC’s brand-new compact car site, where construction work started in September 2012.

“This strategic investment in the localization of compact cars will give us better access to the huge growth potential that this segment offers in the mid-term, and so pave the way for Mercedes-Benz’s sustainable growth,” said Daimler CEO Dr. Dieter Zetsche.

Furthermore, Daimler said the existing production capacities at BBAC for the C-Class, the long-wheelbase version of which started rolling of the production lines in July, the long-wheelbase E-Class, and the GLK-Class will be more than doubled to over 200,000 units a year in 2015.

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