German auto firm Daimler AG on Monday opened a joint-venture to produce engines for Mercedes-Benz cars in Beijing, its first overseas engine plant for the brand. The plant run by Beijing Benz Automotive Corporation, Daimler’s joint venture with Beijing Automotive Industry Holding Corp (BAIC), has a production capacity of 250,000 engines in the initial phase, the German company was quoted by German News Agency (DPA) as saying. “The investment of around 400 million euros (540 million dollars) in our first ever passenger-car engine plant outside of Germany demonstrates … our confidence in Mercedes-Benz’s prosperous future here in China,” said Hubertus Troska, head of Daimler Greater China. Daimler said the opening of the plant is “an important milestone” in its China strategy. Xu Heyi, the chairman of BAIC, said Daimler and BAIC plan to sign a strategic cooperation agreement on Tuesday. Daimler officials declined to comment on speculation that Tuesday’s deal will cement an outline plan announced in February for Daimler to acquire a 12-per-cent stake in BAIC and two seats on its board. In August, Daimler announced plans to invest some 2 billion euros to more than double production capacity in China and raise annual sales in the country to 300,000 units by 2015.