German automotive group Daimler and Foton Motor of China signed a deal on Friday to produce heavy trucks jointly in China, a first for Daimler which is the global leader in truck manufacturing.

The two companies were joined by German Chancellor Angela Merkel during her visit to China in announcing a 50:50 joint venture first floated two years ago.

Trucks under Foton's Auman brand will be produced using Daimler technology in diesel engines and exhaust systems, allowing the vehicles to meet strict European standards, a statement said, without giving financial details.

Earlier this week, German governmental sources had indicated the partners would invest about 800 million euros (one billion dollars) in the deal.

Foton is a subsidiary of Beijing Automotive Industry Corporation (BAIC).

"The joint venture with Foton Motor represents another key milestone in implementing our China strategy. It further strengthens our position to address all segments of the market," Daimler chief executive Dieter Zetsche said in a statement.

The head of Daimler's truck operations, Andreas Renschler, added that the deal would provide a springboard to the Chinese and international markets.

BAIC chairman Xu Heyi said: "We are very pleased to have Daimler Trucks, the world's largest truck manufacturer, as our strategic partner for BAIC's Foton Motor subsidiary."

Daimler's truck division includes the Mercedes-Benz, Freightliner, Western Star and Fuso brands, and sold 259,000 vehicles in 2009 for core earnings of one billion euros (1.29 billion dollars).