(Yicai Global) Dec. 20 -- Huayu Automotive Systems, a Chinese state-backed auto parts supplier, will turn its joint venture with ZF Friedrichshafen into a wholly owned company by paying CNY65 million (USD9.5 million) for the German component maker's half of the business.

Huayu Automotive signed an agreement to buy ZF's stake in Shanghai Sachs Powertrain Component Systems on Dec. 8, Shanghai-based Huayu said yesterday. After the equity transfer, the unit will be included in Huayu's consolidated financial reports.

ZF and Huayu's parent company Shanghai Automotive Industry, a carmaker better known as SAIC, formed Sachs in 2002. It mainly designs and makes clutches and torque converters. The company had operating income of CNY323 million in the first eight months and incurred a net loss of CNY3 million.

The deal will support and promote the development of Sachs' transmission system module business. The company research and develop new products based on the industry's technological trends and is committed to becoming a component supplier that satisfies energy-savings, emissions-reduction and electrification requirements.

Huayu was formerly an auto parts supply department of SAIC Motor, but was spun off into an independent company that listed in 2009. The firm has about 80,000 employees and provides localized parts supply services through its 275 R&D, manufacturing and service bases both at home and abroad.

Editor: Ben Armour