GERMANY's Mercedes-Benz, together with two Chinese partners, plans to invest more than CNY14 billion (US$2 billion) to diversify its product lineup in China, reports Caixin.

In an effort to enhance its position in the world's biggest auto market, where Chinese brands are gaining ground, CNY10 billion will be invested in passenger cars business. Remaining funds used to support the development of its light-weight commercial-focused vehicle business, said the German automaker.

Starting from 2025, Mercedes-Benz will start production of a series of new models tailored for the Chinese market, including an electric long-wheelbase CLA sedan; a long-wheelbase GLE sports utility vehicle (SUV), whose development will be led by its China team; and a luxury electric multi-purpose vehicle (MPV) developed based on its VAN.EA platform, according to the statement.

This investment is part of the German company's attempt to "get more deeply involved in the development of the industrial chains of high-end manufacturing, new-energy vehicles and intelligent connected cars in Beijing, Fuzhou and their surrounding areas," the statement said.

The company is doubling down on China, despite fierce local competition and price wars, and at a time when the German auto market is also struggling at home. VW is in a similar position, and making similar choices.