A Mercedes-Benz car on display at a Beijing auto show. The firm said it will be adding another manufacturing plant in Beijing. Provided to China Daily

Mercedes-Benz will add another manufacturing plant in Beijing and another 300,000 cars to its annual production capacity in China, according to Beijing Automotive Group Co Ltd (BAIC), its joint-venture partner.

"Before the end of this year, the assets of Beijing Mercedes-Benz will be integrated into the BAIC," said Wang Dazong, president of BAIC.

Mercedes-Benz and BAIC began a joint venture in 2006 but profits were hard to come by until last year, when it sold more than 50,000 cars. That is a dramatic increase from 2007, when 7,000 cars were sold.

Related readings:  Mercedes-Benz to open second factory in Beijing  Auto Special: Mercedes-Benz takes five titles in 'Best Car' awards  Auto Special: Mercedes-Benz powers through China's west

Industry experts have seen the announcement of the new plant as a sign that BAIC is continuing to expand.

"Beijing is not a paradise for every industry as the costs are high, so we'll leave high value-added series and mid- to high-level vehicle production in Beijing and shift other models to other bases," Wang said.

In 2010, BAIC sold 1.5 million automobiles and made 11 billion yuan in profits, a year-on-year increase of 75 percent. It was the only State-owned company in Beijing that earned more than 10 billion yuan that year.

In the past few years, BAIC has been planting bases across the country, each having distinct functions: the Shunyi factory in Beijing manufactures high-end cars, a Zhuzhou factory in Central China's Hunan focuses on high-end passenger cars, the Chongqing plant produces economical cars and the Guangzhou plant explores the South China market.

Before 2010, BAIC was the only major auto group in China that did not have its own brand. Although a joint venture with Hyundai is bringing profits, Wang said a lack of name brands will be a major problem in the long run. "If there's no self-brand, we have no products to go global, not to mention any say in the international market," Wang said.

In 2009, the group acquired Saab, a former subdivision of General Motors, and was planning on making its own products, with more than 20 different models, based on the Saab platform. In 2010, BAIC rolled off its first brand car in Zhuzhou plant.

Wang said its overseas expansion is still preliminary. For the moment, commercial cars will lead the way for BAIC's expansion overseas.