Daimler has completed the acquisition of a 12% stake in its Chinese partner, BAIC Motor, the passenger car unit of Beijing Automotive Group, which has just completed the first Mercedes car engine plant outside Germany.

In doing so, it has become the first foreign automaker to hold a significant stake in a Chinese company. Hubertus Troska, Daimler’s Greater China chief, and Bodo Uebber, CFO, will have seats on BAIC Motor‘s board of directors.

The two companies also agreed for BAIC to increase its stake in their production joint venture, Beijing Benz Automotive Company, by 1% to 51%, allowing it to be consolidated within the BAIC group ahead of its planned IPO. 

Meanwhile, Daimler will also increase its share in their sales joint venture, Beijing Mercedes-Benz Sales Service Company, by 1% to 51%.

BAIC Group chairman Xu Heyi told local reporters that it is considering investing in a stake in Daimler to help strengthen their alliance but the size of the investment would depend on market conditions and availability of funds.