(Yicai Global) Oct. 9 -- Ningbo Huaxiang Electronic's shares rose nearly 5 percent today on the news that the Chinese auto parts supplier will shutter its main German factory and lay off workers from other plants in a major shake up of its European operations in order to cut costs.

Ningbo, eastern Zhejiang province-based Huaxiang Electronic's share price [SHE:002048] closed up 4.53 percent at CNY17.78 (USD2.65).

Huaxiang Electronic, which owns automotive interior parts plants in Germany, the United Kingdom and Romania, is to embark on a EUR43.2 million restructuring of its European businesses, the firm said yesterday.

The company, which has been losing money in the region since 2014, will gradually divert production from high-cost European centers to other areas in Germany and Romania which have lower employment costs, it said.

It will close its main German factory NBHX Trim, whose clients include high-end automakers such as Volkswagen, BMW and Mercedes-Benz, and will pay EUR19 million (USD22.4 million) in compensation to the workers. It will also lay off employees from another German factory HIB Trim and its UK plant.

Due to the uncertainty of Brexit, Huaxing Electronic will start to shift its UK production capacity to the EU, it added. The main customers of its British plant include Volvo, Audi, Jaguar Land Rover Automotive and Ford Motor.

Editor: Kim Taylor