(Yicai Global) Dec. 15 -- Shares in Zhejiang Asia-Pacific Mechanical & Electronic jumped 4.2 percent today on the news that the Chinese car brake system maker is to supply French auto manufacturer Groupe PSA, paving its way to enter the European market for the first time.

The company’s share price [SHE:002284] closed at CNY5.96 (USD0.91).

Hangzhou-based Asia-Pacific Mechanical will supply PSA’s factories in Wuhan, central Hubei province with the front calipers used in the brake systems of the PSA Common Modular Platform that builds compact vehicles as well as entry and mid-size sedans, according to the contract penned with PSA Wuhan Management today.

The deal is likely to generate CNY480 million (USD73.3 million) in new sales for Asia-Pacific Mechanical, it said. The collaboration will have a five year life-cycle, depending on customer forecasts, it added.

From 2023, the products will start to be shipped to the European market, marking a breakthrough for the firm. This could serve as an entry point to the rest of the world. Rueil-Malmaison-based PSA’s main markets for its CMP cars including Europe, Asia, Latin America and Africa. US carmaker Fiat Chrysler Automobiles is also planning to develop small cars using the CMP platform in the future, Asia-Pacific Mechanical said.

This is the second global supplier contract for Asia-Pacific Mechanical, following its joining US car giant General Motors’ global emerging markets platform, it said.

Editor: Kim Taylor