July 27 -- Wanxiang Qianchao (000559), a maker of automobile components, will establish a joint venture, Zhejiang Wanxiang Qianchao Marelli Absorber, with an Italian company, Magneti Marelli, in Hangzhou's Xiaoshan district, reports China Business News, citing a company filing.

Total spending on the joint venture is expected to hit 136 million yuan.

Wanxiang Qianchao and Marelli will hold each hold 50 stakes in the joint venture. The deal is pending the approval of the relevant government departments.

Marelli is a subsidiary of Fiat’s wholly-owned subsidiary, MM. Marelli, and specializes in the automobile parts business.

It had total assets of 989 million euros through the end of 2010 and recorded revenue of 975 million euros and net profit of 32.73 million euros last year.

The joint venture will engage in the research, development, manufacturing, and sale of absorbers, and in the provision of related technical consulting services.

The joint venture will build production facilities for 5.7 million units of absorbers in the first phase, which is expected to bring in annual profit of 451 million yuan.

According to Wanxiang Qianchao, the company has 12 years of experience in the absorber business. The cooperation with Marelli will upgrade its technology and enhance the value-added of its products.