(Yicai Global) Oct. 12 -- Chongqing Jianshe Motorcycle Co. [SHE:200054], its controlling shareholder Chongqing Jianshe Mechanical & Electrical Equipment Co., and South Korea's Hanon System Corp. [KRX:018880] will set up a joint venture in China's southwest-central municipality of Chongqing to produce vehicle thermal management systems and parts, the Shenzhen-listed firm said in a press briefing today.

Jianshe Motorcycle and Jianshe Mechanical & Electrical will contribute CNY106.5 million (USD16.1 million) and CNY103.5 million to the company, respectively, while Hanon will provide CNY210 million in cash.

The joint venture will set up variable displacement compressor assembly facilities and core part processing and production lines.

The integration of the companies' variable displacement compressor and air-conditioner technologies through the joint venture will strengthen their ability to meet the technological requirements of the automobile air conditioning industry.

Jianshe Motorcycle plans to utilize Hanon's technological advantages in automobile thermal management systems to develop electric air-conditioning compressor systems suitable for new-energy technologies.

Hanon is one of only two suppliers of automobile thermal management solutions and full-series products in the industry, with Hyundai Motor Co. [KRX:005380], Kia Motor Corp. [KRX:000270], Ford Motor Co. [NYSE:F] and other car makers among its list of clients.