(Yicai) Feb. 6 -- Wanfeng Auto Wheel's shares surged by their daily trading limit after the auto parts supplier said its unit has agreed to form a vertical take-off and landing vehicle joint venture with the Chinese arm of a well-known global carmaker.

Wanfeng [SHE: 002085] soared 10 percent to close at CNY5.17 (73 US cents) a share today. The broader Shenzhen market rallied 6.2 percent.

Wanfeng Aviation Industry penned a non-binding agreement deal on Feb. 4, its Shaoxing-based parent firm said late yesterday. The JV will focus on developing and selling eVTOLs, building production facilities, securing airworthiness certification, and exploring overseas markets, it added.

Wanfeng Aviation and its partner will form a project team to decide further details, including business plans, preliminary investment needs, the initial share ratio, and the JV's investment plans, Wanfeng said, without disclosing the partner's name due to a confidentiality clause.

EVTOLs will be an important part of the future intra-city and inter-city transport network, Wanfeng noted. Wanfeng Aviation has rich experience in the design, development, and making of aircraft, manufacturing of engines, and development and application of new materials, it said, adding that the tie-up will make the eVTOL business a new growth point for the company.

Wanfeng Aviation's Diamond Aircraft are sold to flight schools, airlines, aviation clubs, and individual consumers around the world. Revenue from its aircraft production business was CNY2 billion (USD281.1 million) in 2022, accounting for around 12 percent of the total, according to the firm’s earnings report that year.

Editor: Martin Kadiev