Chinese automaker BAIC Motor Corp Ltd plans to deepen its partnership with Daimler AG by taking a 35 percent stake in the German firm's Mercedes-Benz Leasing Co.

BAIC Motor, the passenger car unit of state-owned Beijing Automotive Group (BAIC) which listed in Hong Kong in December, plans a capital increase to pay for the stake.

The deal, which still needs the approval of the authorities and which will leave Daimler with a 65 percent stake, should be completed at the end of the second or the start of the third quarter, the statement said.

"With this, even more Chinese customers will be able to fulfill their dream of a Mercedes-Benz car in future," said Xu Heyi, chief of the BAIC Motor Corp.

Mercedes-Benz Leasing Co was established in 2012 as the first car brand in China to lease vehicles to both individuals and businesses, with one in four Daimler vehicles in China leased or financed via a Daimler loan in 2014.

Daimler bought a 12 percent stake in BAIC Motor to boost its China presence ahead of the IPO.