A ceremony was held Monday to mark the beginning of construction work on the automobile factory.

The visiting German Chancellor attended the ceremony, saying it represents the growing economic cooperation between Germany and China.

Beijing Benz-DaimlerChrysler is the new joint venture between DaimlerChrysler and Beijing Automotive Industry Holding Co. created to manufacture Mercedes-Benz luxury sedans locally.

The new factory will manufacture up to 25,000 Mercedes-Benz E and C-class sedans.