German carmaker Daimler AG said on Sunday it was increasing its share capital by 10 percent to allow Abu Dhabi's Aabar Investments PJSC to become a major investor in the company.

The cash inflow from the capital increase of 1.95 billion euros will further improve Daimler's sound financial position, Daimler said in a statement.

Subscription rights for the capital increase were excluded for existing shareholder, it added.