Faurecia, the car parts division of French carmaker Peugeot Citroen, said Tuesday it was creating a joint venture with Chinese auto giant Dongfeng that would double its business in the country.
While Faurecia has long been present in China, the joint venture deepens its relationship with the country's number two carmaker, which last year took part control of Peugeot Citroen.
"This new partnership with Dongfeng Motor Corporation ... will contribute to the steady and profitable growth of Faurecia in China," Faurecia's chief executive Yann Delabriere said in a statement.
The joint venture, named Donfeng Faurecia Automotive, should be registered by May and has already been awarded work by Dongfeng Peugeot Citroen Automobile at its vehicle assembly plant in Chengdu in central Sichuan province.
It initially targets the development, manufacturing and delivery of automotive interior and exterior components but quickly plans to include automotive seating and emissions control technologies.
While Dongfeng Peugeot Citroen Automobile, the joint venture plans to expand to all regions in China where Dongfeng and its automotive partners operate. In addition to its own marque, Dongfeng also has partnerships with Nissan, Honda, Renault, Kia and Yulong.
Faurecia said the target is for the joint venture to book 2 billion euros ($2.2 billion) sales annually in the medium term.
That would nearly double the Faurecia's sales in China, which hit 2.2 billion euros last year, a 20 percent increase over 2013.
The governance and management of the joint venture will allow it to be consolidated into Faurecia.
The company, which employs over 100,000 people in 34 countries, posted sales of 18.8 billion euros last year.
Faurecia's share price shed 0.70 percent to 40.92 euros in midday trading on the Paris stock exchange, whose blue-chip CAC-40 index was down 0.18 percent overall.