(Yicai) Sept. 1 -- Shares of IAT Automobile Technology rose after the Chinese car designer said it plans to convert fuel-powered trucks to electric with Yamato Industry and develop and supply related parts and components to meet Japan's new energy vehicle market needs.

IAT [SHE: 300825] closed 4.5 percent up at CNY18.65 (USD2.57) in Shenzhen today, after soaring by as much as 6.2 percent in the morning trading session. Yamato Industry [TYO: 7886] fell 2.1 percent to JPY1,051 (USD7.23) in Tokyo.

IAT has inked a letter of intent with the Japanese synthetic resin moldings and logistics equipment maker to select, design, and develop parts needed for vehicle modifications and provide technical support, it said late yesterday. The conversion service will be offered to Japanese logistics firms first, it added.

Under the deal, Yamato Industry aims to convert 5,000 vehicles in the first year and 10,000 in the second year, before gradually increasing that to 20,000 a year, IAT said.

IAT's Japanese subsidiary owns 33 percent of Yamato Industry, where Director and Deputy General Manager Liu Jian is also a director, making the deal a related-party transaction, the Beijing-based company pointed out.

In addition to the vehicle modification business, Yamato Industry will commission IAT to develop new battery packs and procure and allocate high-quality and cost-competitive battery cells for Japanese trucks, while Yamato Industry will supply structural parts made of synthetic resin for the battery packs.

The two firms plan to complete trial production by the end of this year, bringing the packs to the market in the second half of 2024 and aiming to sell 10,000 within several years, IAT noted. They will also develop electric vehicle components, with some to use Yamato Industry’s high-functioning resin materials, it added.

IAT's clients include car giants Volkswagen Group, Mercedes-Benz, Honda Motor, and Nissan Motor, according to the listing prospectus it released in March 2020 before going public.

Editor: Martin Kadiev