According to the deal worth 16 billion yuan (2.04 U.S. dollars), the Shenyang-based company's Zhonghua cars will be distributed in Germany, the Netherlands, Luxembourg, Belgium, Austria, Switzerland and Poland through the Bremen-based HSO Auto Trading Company.

It is a breakthrough for the Chinese car-making industry, which is more commonly associated with exporting low-end models to southeast Asia, the Middle East and Africa.

Brilliance Auto did not reveal the prices of the exported cars but Thursday's Beijing News quoted an anonymous insider involved in the deal as saying that the first batch of the Zhonghua Zunchi cars were priced between 19,000 euro and 23,000 euro each and the Zhonghua Junjie cars at between 16,000 euro and 18,000 euro.

The export prices were higher than domestic ones because Brilliance Auto improved the cars to ensure they met German standards, including safety and emission standards, said the newspaper report. However, the cars are still 20 percent cheaper than those of the same grade on the European market.

Statistics show that China's car exports have been on the increase in recent years, with exports reaching 173,000 vehicles in the first seven months this year, as much as the total exported during the whole of 2005.

However, the average export price dropped from 16,100 U.S. dollars per unit in 1999 to 9,100 U.S. dollars in 2005, mainly as a result of fierce price undercutting among domestic automakers.

"Auto export disputes have reached a peak in China," warned Wang Qinhua, an official with the Ministry of Commerce, adding that Chinese automakers would face increasing risks of anti-dumping charges when they started to export cars to developed countries.

To regulate the exports, the Chinese government is planning to set higher requirements for the country's car exporters, according to the Beijing News.

A total of 160 car makers and auto parts manufacturers were qualified to export their products by August.