Daimler's Mercedes-Benz is adding production capacity and expanding its retail network in China as the automaker tries to catch up with premium rivals Audi and BMW.
"We recognize the strong potential of the Chinese market and we have initiated key activities for long-term and sustainable growth," said Joachim Schmidt, Mercedes head of sales and marketing.
Daimler expects China to become its largest market within two years, overtaking its current No. 1, the United States, and second-ranked Germany.
Schmidt said Daimler aims to sell more than 300,000 Mercedes and Smart brand cars in China in 2015, up from just below 200,000 last year. The automaker expects to benefit from the increasing appetite for premium cars among China's rapidly growing middle and upper classes.
"Those customers demand prestigious brands, top products, innovations as well as excellent quality and service," Schmidt wrote in an e-mail.
Daimler will more than double output at its Beijing joint venture factory with Beijing Automotive Group to 200,000 units in 2015 from 96,500 last year as part of its strategy to build locally two-thirds of the vehicles it sells in China, up from about 50 percent last year.
At the end of next year, the company will add production of the GLA crossover at the plant alongside the C class, GLK, and long-wheelbase E class.
Increasing sales in China will boost Daimler's bottom line because most of the automaker's models sold in the country are high spec.
"Premium cars in China are often chauffeur-driven so the vehicles that customers ask for are those with a spacious rear area where the passenger can work comfortably and enjoy high entertainment standards," Schmidt said. "Great importance is also attached to interior comfort so most cars are sold with full equipment."