(Yicai) March 20 -- Chinese vehicle parts manufacturers Zhejiang VIE Science & Technology and Hwaway Technology are preparing to invest EUR30 million (USD32.7 million) to build an auto components factory in Morocco so as to better meet the needs of their customers in North Africa and Europe.

The factory, which will be located in Tangier, will be run by a joint venture set up by the two companies that will handle the project’s investment, construction and operations, the two Shaoxing-based firms said in separate announcements yesterday. Hwaway will own 65 percent of the JV and VIE the remainder.

The Moroccan plant will be built in phases, depending on market demand and business expansion progress, both parties said. No further details, such as the type of products, annual production capacity or construction timeline, were given.

The deal is a related party transaction as the owner of VIE, which specializes in automotive chassis control systems and autonomous driving technologies, is also the fourth-largest shareholder of Hwaway, which is a supplier of mid-to-high-end automotive elastic components.

Morocco’s strategic geographic position amid shifting global trade dynamics have made it a hotspot for Chinese car parts manufacturers. Lingyun Industrial, for instance, also announced plans last month to build a production base for vehicle pipelines and structural body parts in the North African country.

Both VIE and Hwaway’s share prices saw significant fluctuations today. VIE’s share price [SHE: 002590] closed up 2.9 percent at CNY14.42 (USD2) today, while Hwaway [SHE: 001380] ended the day up 2.6 percent at CNY34.28 (USD4.74) after trading in deep underwater in morning session.

Editor: Kim Taylor