GENEVA (AFP) – Chinese auto maker BYD (Build Your Dreams) and German giant Daimler have signed a preliminary agreement to build anelectric car together, company executives said at the Geneva motor show on Tuesday.

Under the memorandum of understanding, the world's oldest automaker and one of the youngest aim to market the vehicle under a new jointly owned brand, merging their technological knowhow forChina's fast expanding urban market.

"Under the agreement Daimler and BYD intend to develop a newelectric vehicle specially for the requirements of the Chinese market," said BYD general manager Henry Li in Geneva, calling it a milestone for the fledgling company.

"This is a cooperation between the most senior automaker and the youngest ... between the country with the best auto industry and the country with the biggest auto market," he told journalists.

Daimler chairman Dieter Zetsche said the company was taking a foothold in the potential growth of the electric vehicles in China and its huge cities, now the world's biggest and fast growing car market.

"Daimler's knowhow in electric vehicle architecture and BYD's excellence in battery technology and e-drive systems are a perfect match," Zetsche said in a statement.

Launched just seven years ago, BYD Auto now claims to be the sixth biggest car maker in China and its future plans are focused on electric or hybrid vehicles.

The Chinese firm unveiled its E6 people carrier in Europe for the first time at the Geneva Motor Show, which opened its doors to industry watchers on Tuesday ahead of the public opening on Thursday.

It aims to sell the car in Europe in 2011.

Daimler, which made one of the first cars in the world in the 19th century, is the parent company of brands Mercedes and Smart."