(Yicai Global) Nov. 2 -- Japanese trading conglomerate Sumitomo plans to set up a joint venture in China's Henan province to make aftermarket vehicle parts in the world's largest auto market.

Sumitomo and Henan Zhongxin Enterprise Group penned a letter of intent for the partnership in Japan on Oct. 31, the Tokyo-based firm said in a statement the same day. The new firm will provide parts for garages run by Zhongxin as well as selling accessories and firefighting supplies for medium- and high-end vehicles.

Chinese drivers rarely opt for genuine parts and usually prefer to buy aftermarket components, the statement said, adding that the joint venture will aim to compete with local manufacturers, which are often the go-to. The pair aim to be raking in revenue of over JPY150 billion (USD1.3 billion) by around 2025.

Zhongxin competes in a range of sectors, from communications to insurance, and moved into the auto industry in 2004. It now runs 60 repair shops in Henan and Shandong provinces and wants to have 10 times as many within the next five years so it can increase its parts sales. It also plans to supply other garages based in Beijing and Shanghai.

Sumitomo is one of Japan's five biggest sogo shoshas, which are sprawling companies engaged in multiple sectors around the world, and has 129 offices in 66 countries and regions. It began trading in China in the 1970s, and now runs more than 70 firms throughout the nation.

Editor: James Boynton