(Yicai Global) Oct. 30 -- Auto parts manufacturer Huada Automotive Technology Co. [SHA:603358] is pairing with the industrial investment company of Beijing Automotive Group Co. to finance a merger and acquisition fund for the auto industry worth USD150.38 million (CNY1 billion).

The investment direction lies in the industry of automobile new energy and new materials.

The initial contribution to the fund will be CNY200 million, the Jiangsu province-based Huada Automotive Technology announced yesterday, of which it will invest CNY110 million, Beijing Automotive Group will pony up CNY85 million and the fund manager -- a Shenzhen fund -- will ice the cake with the remaining CNY5 million.

The fund's investment direction is new-energy vehicles and new materials, including automotive lightweight technology, smart technology, Internet of Vehicles, the automotive after-sales-market and other related fields.

Beijing Automotive Group, one of China's state-owned auto giants, set up an industrial investment company in 2012 and has endowed 29 funds with USD30 billion in capital as of now. The company's investment projects exceed 40, among which nine have achieved a return on investment and have exited.

Huada Automotive Technology mainly produces passenger car body and engine parts, and its customers are FAW-Volkswagen Automobile Co., SAIC General Motors Corp. and other Chinese and foreign joint-venture automobile manufacturers.