DaimlerChrysler AG has formally opened its first factory to make Mercedes-Benz and Chrysler sedans in China, joining a rush of foreign automakers scrambling for a share of the booming Chinese car market.

DaimlerChrysler said the factory, which opened Sept. 15 in suburban Beijing, is part of a $1.9 billion investment in China.

The company plans to expand its financing business and is talking to potential Chinese partners about possibly producing a lower-cost model for the U.S. market, Chairman Dieter Zetsche said.

“DaimlerChrysler is strongly committed to this market for the long-term future,” Zetsche said.

Earlier, Zetsche and VIPs, including the Communist Party secretary of Beijing, attended a grand opening ceremony with fireworks and traditional Chinese drummers and dancers.

The German-U.S. automaker is a latecomer to manufacturing in China, the world’s second-largest car market after the United States, with 7 million new vehicle sales a year.

However, before its 1998 merger with Daimler Benz AG, Chrysler Corp. became the first Western company to produce vehicles in China since the 1949 Communist revolution when it opened a joint-venture Jeep factory in Beijing in 1983. That factory has since closed, but the joint venture continues to produce Jeeps for sale in China at another plant in the suburbs of Beijing. It is DaimlerChrysler’s only other car plant in China.

General Motors Corp., Volkswagen AG, Toyota Motor Corp. and other competitors already make cars in China.

Car sales in China are growing at double-digit rates, but DaimlerChrysler is opening its factory just as the government is rolling out new taxes meant to slow the growth of air pollution by reining in sales of bigger luxury cars.

A key challenge for foreign automakers in China is the government’s insistence that at least 40 percent of their components come from Chinese suppliers, whose quality is still uneven. Zetsche said DaimlerChrysler intends to meet that target, though he acknowledged that it would not be able to do so immediately.

Zetsche declined to comment on U.S. and European complaints that China’s tariffs on auto parts are too high. The governments are reportedly considering filing a World Trade Organization complaint against Beijing.

The DaimlerChrysler factory is to produce Mercedes E-Class and Chrysler 300C sedans, as well as Mitsubishi’s Outlander sport utility vehicles. It has an annual capacity of 25,000 Mercedes and 80,000 Chrysler and Mitsubishi vehicles.

Zetsche said the company expected sales to meet those levels but would not say how long it would take. He said the factory is expected to be profitable when sales are well below its full capacity.

The factory, which employs 1,200 people, began test-production of vehicles last December and has made about 4,100 Mercedes sedans since then, DaimlerChrysler spokesman Trevor Hale said. He said Chrysler production is due to start in October.

“We’ve had a very slow ramp-up to make sure we get the quality right,” Hale said. “As we identify more suppliers that meet our standards, we bring them into the supply chain.”

In contrast to General Motors and other automakers that have produced specially designed models targeted at the Chinese market, the Mercedes and Chrysler models to be made in Beijing are identical to those sold abroad. The company has not disclosed prices for the models made in Beijing.

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