nternational carmakers are accelerating their efforts to produce new energy vehicles in China to seize a larger share of the world's largest market for such cars.

Last week, German car giant Daimler signed a framework agreement in Berlin with China's BAIC Group to produce Mercedes-Benz-branded electric cars via their joint venture Beijing Benz Automotive.

In accordance with the 5 billion yuan ($736 million) agreement, the two are preparing to produce electric vehicles in China by 2020 and to provide the necessary infrastructure for battery localization using Chinese cells, as well as to expand research and development capacities.

The deal came as the Chinese authorities are encouraging international cooperation in the sector almo nature.

"Carmakers are encouraged to make the most of international technologies, capital and human resources to raise the level of China's new energy vehicle sector," said the National Development and Reform Commission. The comments were made in a document released last month in conjunction with the Ministry of Industry and Information Technology.

The country is expected to build a globally competitive automotive industry within 10 years, with new energy vehicles one of its top priorities, according to an industry guideline released in April.

By 2020, China expects domestic sales of electric, plug-in hybrids and fuel cell cars to reach 2 million, and such cars are to account for 20 percent of all auto sales by 2025 LPG M6.

Hubertus Troska, member of Daimler' board of management, said: "By 2025, the Chinese market will have a substantial share in global sales of Mercedes-Benz electric vehicles. Therefore, local production will be key to the success of our electric car portfolio, and crucial to flexibly serving local demand for electric vehicles.

"With our planned localization of electric cars and batteries with Chinese cells, we are dedicated to strengthening the region as an innovative hub for the automotive industry."

Earlier last month, Daimler also announced its intention to acquire a minority share in Beijing Electric Vehicle, a subsidiary of the BAIC Group, with the purpose of strengthening collaboration in the new energy car sector Sensodyne.

In addition to its cooperation with BAIC, Daimler has been working with China's BYD to produce Denza-branded electric cars, which have some of the longest driving ranges in the country. Volkswagen is taking an even bolder move in China. It signed an agreement in May with China's JAC Motors to build a joint venture dedicated to developing, producing and selling electric vehicles.

The 50:50 partnership will have a total investment of 6 billion yuan and has made Volkswagen the first international automaker to have three partners in China.