Daimler AG, the world's biggest commercial-vehicle maker, began building a van plant in China to meet the growing economy's vehicle needs, a report from Bloomberg said Tuesday.

Located in Fuzhou, capital of East China's Fujian Province, the plant costs more than 200 million euros (US$284 million) and will begin operation in mid 2009, the report quote a Daimler spokesman in Beijing as saying.

The plant will make 40,000 vehicles a year, including Mercedes-Benz Viano and Vito multipurpose vehicles and Sprinter vans, the spokesman said.

International truck makers like Daimler and Hino Motors plan to expand their capacity in China due to high demand boosted by the country's growing economy, the report said.

Data released by China Association of Automobile Manufacturers shows that the country's commercial vehicles reached 1.88 million units in the first nine months of 2007, up 26 percent year-on-year.

"Demand for vans for business use has been rising quickly in China and consumers still have a limited choice as only a few of them are locally made," Huang Zherui, an analyst at CSM Asia in Shanghai, was quoted as saying. The new plant will "have great potential," he added.

Daimler's Viano and Vito multipurpose vehicles compete with General Motors Corp's GL8 and Honda Motor Co's Odyssey. Annual sales of multi-purpose vehicles in China may more than double to 500,000 from 200,000 in the next 10 years, according to Daimler.

Daimler now holds 34 percent of the new venture, Fujian Daimler Automotive Co, Fujian Motor Industry Group owns 50 percent and Taiwan-based China Motor Corp has the rest 16 percent.

The German automaker opened its first Chinese sedan plant in Beijing in September 2006 to make models including Mercedes-Benz E-class cars. The plant has a capacity of 105,000 vehicles a year, which will nearly triple once a second phase is completed, according to the report.