(Yicai) April 30 -- Shares of Jifeng Auto Parts rose after the Chinese maker of automotive seating components said that BMW will order CNY12 billion (USD1.7 billion) of products from its unit in Germany, marking the Asian firm's entry into the high-end segment of cars in Europe.

Jifeng [SHA: 603997] closed 1.8 percent higher at CNY13.27 (USD1.80) in Shanghai today after moving up as much as 4 percent earlier.

Jifeng’s German subsidiary received a letter from the owner of brands BMW, Mini, and Rolls-Royce to develop and produce front and rear seats for passenger cars created on BMW's new development platform and sold in Europe, the Ningbo-headquartered firm announced yesterday. 

The project is expected to start in the second half of 2027 with a lifecycle of eight years and the total revenue should reach CNY12 billion.

This is Jifeng's first nomination as a designated supplier for high-end vehicles abroad, making it a significant milestone in the company's transition from a domestic supplier to a global one, the company said, adding that this should be helpful in its efforts to expand internationally and gain more orders overseas.

Last year, Jifeng won similar acknowledgments from Audi and Volkswagen for cars sold in China. This highlights how renowned German luxury marques recognize Jifeng's capabilities in product development, design, technical quality, and production, it added.  

The Chinese firm has been doubling down on research and development this year. In the first quarter, Jifeng earned CNY19.1 million (USD2.6 million) in net profit, down 68 percent from a year ago, due to surging management and R&D expenses, while revenue climbed by 3 percent to CNY5.2 billion (USD730 million), according to a financial report also released yesterday.

Editor: Emmi Laine