China Trade Information

Ningbo Huaxiang Electronic Co<002048> announced on Wednesday, that it will be setting up an auto parts joint venture with Chinese auto maker FAW Group, with an eye on taking in more shares in the auto parts markets.

Under the venture, Ningbo Huaxiang will be spending RMB 490 million, to buy over 49% stakes of Fawer Automotive Parts, while FAW, one of Volkswagen’s wholly-owned subsidiary will be holding 35% stakes in the new company.

This move by Ningbo Huaxiang displays it determination to further its presence in the auto parts sector.   Through this opportunity, Huaxiang will be able to build ties with nationwide auto companies and step into a more diversified vehicle market through FAW’s rich products chain. 

Products of the new company is complementary with Huaxiang’s existing products. The joint venture will combine resource advantages of both parties, thereby enhancing their competitive force and occupation rate in the market.

Huaxiang, an auto parts supplier, was founded in 2001 and successfully listed in Shenzhen Stock exchange in June 2005. It is engaged in research and development of sedans parts.

Tags: Auto

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