German luxury carmaker Daimler is eyeing a stake in the passenger car unit of its Chinese partner BAIC Group, in a bid to overcome its weakness in the world's largest car market, three sources said.

"When BAIC Motor is floated, Daimler may take a stake of 10 to 20 per cent," one of the sources said yesterday, adding the size of the stake depended on discussions with its Chinese partner.

Daimler is the maker of Mercedes-Benz cars.

The chairman of state-controlled BAIC, Xu Heyi, said in September it aims to list its passenger car subsidiary BAIC Motor in 2013, hoping to raise around 10 billion yuan ($1.6 billion).

Two sources said BAIC Motor is expected to be listed in Hong Kong this year, targeting a volume of at least $1 billion, while other sources cautioned that an initial public offering may be delayed until next year.

Goldman Sachs and Morgan Stanley have been mandated to organise the listing, they said.-Reuters