MILAN (Reuters) - Chinese electric vehicle giant BYD launched on Monday its premium Denza brand in Europe, aiming to support its expansion in the region and compete with top-end German manufacturers such as BMW and Mercedes.

BYD sold over 4.2 million vehicles globally last year, with more than 90% of them in China. Sales of Denza - once a 50:50 joint venture with Mercedes and now fully owned by BYD - accounted for just over 3% of the group's total sales.

The group's special adviser for Europe, Alfredo Altavilla, said Denza would be the technological forerunner for the group.

"It will anticipate tech features that will later appear on BYD brand cars," he said after the presentation at Milan's Design Week, also attended by Executive Vice-President Stella Li.

BYD in 2024 had a 2.8% share of the European EV market, after introducing hybrid vehicles to help expand its reach.

Denza sales in the region will start at the end of the year with the EV version of its 1,000 horsepower Z9 GT sport wagon, and with a hybrid version in early 2026.

The group did not give further details of its commercial strategy and product plans for Europe. The price of the first model, still undisclosed, will exceed the highest car price in BYD's current European range, of 72,000 euros ($78,790).

The Denza range will also include, from the end of this year, the D9 van, while two off-road vehicles could be added in the future, Altavilla said.

"The aim is to make Denza a full-liner premium brand," he said, adding it targets both traditional premium clients and younger customers, who have a particular interest in technology.

The Denza models will be manufactured and exported from China despite BYD planning to start production at its first European plant, in Hungary, in October.

A second BYD site in Turkey is expected to come on line in March 2026. When fully operational, they will have a total production capacity of 500,000 cars per year.

($1 = 0.9138 euros)