China's Ningbo Huaxiang to set up auto parts JV

SHANGHAI, Dec 5 (Reuters) - Chinese auto parts supplier Ningbo Huaxiang Electronic Co (002048.SZ: Quote, Profile, Research, Stock Buzz) said on Wednesday it has agreed to set up an auto parts joint venture with Chinese auto maker FAW Group, which will have a paid-in capital of 1 billion yuan ($135 million).

Ningbo Huaxiang will take 49 percent of the Fawer Automotive Parts, with an investment of 490 million yuan, it said in a statement. FAW, one of Volkswagen's (VOWG.DE: Quote, Profile, Research, Stock Buzz) China partners, will hold 35 percent, with the management of Fawer, an auto parts unit of FAW, holding the balance, it said.

Ningbo Huaxiang said it would fund the venture through internal resources, although the plan needed regulatory approval.

In August, Ningbo Huaxiang said it had agreed with Germany's Schefenacker [SCHE.UL] to set up an auto parts venture, each investing 50 million yuan.

The firm was in preliminary talks to buy a German auto parts maker for between 1 billion and 1.5 billion yuan, according to a statement released in September, which did not identify the potential acquisition target. ($1=7.398 Yuan) (Reporting by Fang Yan; Editing by Anne Marie Roantree)