POSCO to invest $2.5 mln in China car parts plant

SEOUL Jan 16 (Reuters) - POSCO (005490.KS), the world's fourth-largest steel maker, said on Wednesday two of its units will invest $2.5 million in a car parts plant in China, marking the South Korean steel maker's entry into the car parts business.

The units will set up a joint venture with Austem (031510.KQ), a South Korean car parts maker, to produce body panels and chassis, a spokesman said.

POSCO units will hold a stake of 19.9 percent in the company and Austem will have 80.1 percent.

The company is expected to produce the parts early in 2009 and supply them to Shanghai GM, General Motors Corp (GM.N)'s venture with Shanghai Automotive Co. (600104.SS) (Reporting by Kang Shinhye; Editing by Keiron Henderson)