Japan's Aichi Steel Corp. on Monday announced it will set up an auto parts joint venture in Shanghai next month with three other firms.
The new company, named Shanghai Aichi Forging Co., will produceforged automobile parts for China and Southeast Asian countries bytaking over Shanghai Automotive's existing factory there, Aichi Steel said, adding that the new firm is set to begin operation in June.
The joint venture, with a capital of 15 million U.S. dollars, will be owned 42 percent by Aichi Steel, 40 percent by China's Shanghai Automotive Forging Works and 9 percent each by Japanese trading firms Sumitomo Corp. and Toyota Tsusho Corp., according toAichi Steel.
Aichi Steel and Toyota Tsusho are both affiliates of Toyota Motor Corp.
It expects to sell 10,000 tons of products in its first year ofoperation and gradually increase production to 27,000 tons by 2006,Aichi Steel said.
Its clients will include Volkswagen AG, General Motors Corp. and Toyota, according to Aichi Steel.