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Mitsubishi Electric conducts tests in an electromagnetic anechoic sound chamber (Photo: Mitsubishi Electric)

Mitsubishi Electric Corporation said it plans to grow its Chinese automotive multimedia business by establishing a joint venture with QiMing Information Technology Co, a subsidiary of carmaker FAW.

The two companies, which have worked together since 2004, agreed to set up Changchun Qiming Lingdian Automotive Electronics Co, in Changchun, Jilin province this August. The venture, which is scheduled to start operations in January, 2012, will develop, manufacture and sell car multimedia products in China.

The new company is expected to employ about 400 people by 2016.

It is the second announcement in four months signaling that Japan's Mitsubishi Electric aims to play a bigger role as an electronics supplier to the Chinese car industry. The company, a large maker of electrical and electronic components and equipment, announced in March that it was establishing a new Chinese unit, Mitsubishi Electric Automotive (China).

The joint venture with QiMing announced this month will allow Mitsubishi Electric it to grow its automotive business, especially in China, where it expects demand for in-car multimedia equipment to pick up as economic prosperity increases.

QiMing Information Technology Co will hold 51 pc of the joint venture, whileMitsubishi Electric will have a 33 pc stake. Mitsubishi Electric (China) will have a 10 pc holding and Koshida Corp will own 6 pc.

In March, Mitsubishi Electric Automotive (China) said the establishment of its subsidiary in Changshu, Jiangsu Province,would help it grow automotive equipment sales in the world's biggest car market.

The Chinese unit, which is expected to begin operations in April next year, should help Mitsubishi Electric boost automotive sales to 50 billion yen a year by 2016, the ocmpany said.

Mitsubishi Electric Automotive (China) will manufacture and sell electric power steering equipment, automotive multimedia products and other automotive equipment in China, with a workforce of 500 employees in place by March 2016.