Europe's biggest truck-maker Daimler AG and China's largest commercial vehicle producer Beiqi Foton Motor signed a final agreement today in Beijing to set up a 50:50 joint venture for making medium- and heavy-duty trucks, media reported.

Today, the joint venture contract was signed in the presence of the Premier of the People's Republic of China Wen Jiabao and visiting German Chancellor Angela Merkel. The approval for the deal was granted by the Chinese government's top economic planning body.

The trucks to be produced in the 6.35 billion yuan ($937 million) venture in China will bear Foton's Auman nameplate and use engine technology from Daimler's Mercedes-Benz unit. The Daimler-Foton venture will have an annual capacity of 100,000 vehicles and 45,000 heavy diesel engines.

By working with Daimler, Foton plans to boost its exports to 30% of its vehicle sales by 2015, up from 8% this year. Daimler will also start making passenger-car engines at its car-making venture with Beijing Automotive Industry Holding Co. (BAIC), Beiqi Foton's parent.

"The joint venture offers us an excellent springboard from which we can achieve growth, profitability and expansion in China," Andreas Renschler, member of Daimler's management board and head of Daimler Trucks and Daimler Buses, said in today's statement.

Daimler is the world's largest truck maker by sales and the world's second-best-selling luxury car maker behind BMW AG. Sales of its Mercedes-Benz cars in China more than doubled in the first half to 59,600 units, the company said.