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Japanese-owned components group Denso and its part-owned air conditioning systems company GAC are to form a joint venture with a local manufacturer in China to produce air conditioning systems for Chinese-made buses.

The pair are to form a new company with Yangzhou Jiexin Auto Air-Conditioner Co, based in Jiangsu, to make systems for buses, with production starting in April.

The new company will be 50:50 joint owned and the total investment amounts to only $2.5 million, as the new business will use existing plant and equipment from the Chinese firm.

The joint venture will employ about 150 people and Denso said that it expected sales to reach ¥5 billion (€30 million) within two years.