Delphi will hold 60 percent of the half-shaft manufacturing company in the eastern Chinese province of Anhui, its second such venture with China's Hebei Lingyun Industrial Group, it said in a statement. Lingyun will own the remaining 40 percent.
The venture, which will hire about 500 people and start full operation by mid-2008, will double the half-shaft capacity of Delphi's steering division in China, the U.S. firm said.
"China's automotive market is expected to grow to more than 7 million light-duty vehicles by the 2008 timeframe, and we are solidly positioned to grow in this market," Robert J. Remenar, president of Delphi Steering said in the statement.
Delphi, which runs 11 manufacturing facilities in the China, provides more than 40 kinds of parts to General Motors, Volkswagen AG and other major foreign automakers.
Delphi has invested more than $500 million so far in China, the world's second-largest auto market.