SHANGHAI, March 12 (Reuters) - Mercedes-Benz will develop smart-driving cars for global markets equipped with lidar sensors made by Chinese company Heisei, a person familiar with the matter said, marking the first time a foreign automaker has sought to use such Chinese-made technology in models sold outside China.

This comes as trade tensions escalate with the United States intensifying its efforts to reduce global auto companies' reliance on Chinese components and software solutions.

Meanwhile, German car companies, which contribute significantly to their country's struggling economy, are striving to become more competitive.

The source, who declined to be identified due to the confidentiality of the matter, said that Mercedes had been considering the decision for several months due to the legal and geopolitical risks.

The source added that Mercedes ultimately settled on Chinese company Hesai, the largest manufacturer of lidar sensors, due to its low cost and ability to produce in large quantities.

A Mercedes-Benz spokesperson said the company does not comment on speculation about new suppliers.

Shares of Hesai, listed on the New York Stock Exchange, jumped 36.6 percent in early trading. On Monday, the company forecast net profit for 2025 to be between 3 billion and 3.5 billion yuan ($415 million and $484 million).

Hisai, a competitor to US-based Luminar, announced on Monday an "exclusive, multi-year" contract to supply its lidar products to an unnamed European automaker it described as a leading company.

LiDAR technology uses laser beams to create 3D images of a vehicle's surroundings, helping it navigate easily. These sensors are an essential part of many autonomous driving systems developed by automakers.

* Business decision

Andrew Fan, Hessay's chief financial officer, told Reuters in an interview Tuesday following the company's quarterly earnings release that the decision was a commercial one by the partner, but declined to name the company.

"The car company sought alternatives that matched Hisai's products in terms of performance and price, but the result was that there was no alternative," Van continued.

He added that European car companies use Heisei as a supplier of lidar sensors for their models sold in China.

Fan said Hesai is expanding two production lines in China to increase its annual capacity to more than 2 million units this year to meet growing demand.

(USD = 7.2263 Chinese Yuan)

(Prepared by Sara Eid Ibrahim for the Arabic edition - Edited by Ayman Saad Muslim)