(Yicai Global) Dec. 4 -- Germany’s Daimler Truck and China’s Beiqi Foton Motor will build a factory near Beijing to produce Mercedez-Benz-branded heavy-duty vehicles, as the country looks set to account for over half of global sales this year.

Beijing Foton Daimler Automotive, the joint venture founded in 2012 between the two parties, will invest more than CNY3.8 billion (USD581.7 million) in a production line in Huairou, the two firms said earlier this week.

Its first China-made Mercedes-Benz tractor is expected to hit the market in 2022. It will be tailored to the needs of Chinese customers but will be equipped with the Stuttgart-based firm’s latest engine, they said.

The booming e-commerce and logistics industries in China have created considerable opportunities for the truck industry, said Hubertus Troska, chief executive officer and chairman of Daimler Greater China.

China sold over 1.22 million heavy-duty trucks in the first three quarters, already 46,000 more than the total sold last year, according to the China Association of Automobile Manufacturers.

As a result, overseas manufacturers are accelerating their localization in the country. Both Germany’s Volkswagen truck brand Scania and Sweden’s Volvo Trucks recently announced that they will start to manufacture heavy goods vehicles in China.

Foreign heavy-duty trucks are more fuel-efficient than local makes which means they are more economical to run in the long term, said Cui Dongshu, secretary general of the China Passenger Car Association. If they are made locally, this can theoretically slash 30 percent off their purchase price.

There is unlikely to be close competition between domestic and foreign truck brands in the short term as they are not on the same level, said Cui. Manufacturing foreign truck brands in China will greatly boost the industry and upgrade the industrial chain to a new level, he added.

Over 40 percent of truck models will be priced around CNY400,000 (USD61,000) per unit by 2025 and the penetration rate of advanced technologies will continue to grow, said German consultancy firm Roland Berger.

Editors: Tang Shihua, Kim Taylor