Beijing Automobile Industry Holding Co.'s joint venture with Daimler AG is seeking 12.8 billion yuan ($2 billion) in loans from a group of banks for new production lines and an engine factory.
Beijing Auto Chairman Xu Heyi confirmed the news in an interview in the Chinese port city of Dalian, where he attended the World Economic Forum meetings.
In June, Daimler and Beijing Auto signed an agreement to spend 2 billion euros to build four new models in China, expand engine production and construct a new r&d center.
Daimler's joint venture with BAIC, called Beijing Benz Automotive Co., currently produces up to 80,000 C-class and "stretch" E-class sedans in China each year. Daimler said it will expand production, without detailing how much capacity it plans to add.
The joint venture's new new engine plant will start producing four-cylinder gasoline engines in 2013. Initially the facility will produce 100,000 engines a year, with plans to expand annual production to 250,000 units.
The new technical center will handle vehicle testing and adaptation, plus r&d with suppliers.
Xu added that Beijing Auto is in talks with partner Hyundai Motor Co. to create a China-only brand to produce electric cars. Earlier this month, Chinese media had reported that the two partners might do so.
The first electric vehicle may be introduced by year end, Xu said.
Daimler and Nissan Motor Co. already have announced plans to introduce EVs in China. The government aims to have 1 million electric-powered vehicles on the road by 2015, according to the Ministry of Science.
Sources: Bloomberg; with contributions from Automotive News China