DaimlerChrysler has begun talks with Chinese officials to begin assembling Mercedes C-Class and E-Class luxury cars in a joint venture with a local partner, people familiar with the matter told The Wall Street Journal.

The paper said the sources told it that the car maker expects to have an agreement in place later this year, and hopes to set up a plant where Chinese workers would build the vehicles from kits shipped from Germany.

DC eventually expects to assemble 20,000 to 30,000 Mercedes cars a year in China, the WSJ report said.