KUALA LUMPUR (Oct 28): APM Automotive Holdings Bhd has formed a 60:40 joint venture (JV) with Japan's Delta Kogyo Co Ltd to develop automobile seating system for Mazda cars.

In a filing with Bursa Malaysia today, APM said its wholly-owned subsidiary, Auto Parts Holdings Sdn Bhd, has entered into an agreement with Delta to carry on the business of developing, manufacturing, assembling and sale of automobile seating system for cars made by Mazda Motor Corp, including Mazda CX-5.

They will also look into developing and selling the seating system for other generic models as well as cars made by other companies, besides developing and selling non-seat products.

APM said the investment in the JV company will be financed through internally generated funds.

The company said the move creates the opportunity for the JV company to supply completely knocked-down (CKD) seats, seat frames and components into the Asean market.

According to APM, the automotive industry is poised to grow in the upcoming emerging markets in the ASEAN region.

The company believes the timing of the JV is appropriate to capture the opportunities to expand its current seat business overseas.

"APM's investment in the JV is expected to generate reasonable returns in the longer term but will have no material effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholders' shareholding of APM for the financial year ending Dec 31, 2016," it added.

Delta was incorporated in Japan in 1953 and is in the business of designing and manufacturing automotive seating and seating parts, and developing seating for trains, airplanes, ships and for homes, theatres and hospitals.

Shares of APM closed unchanged at RM3.31 today with 136,900 shares traded, for a market capitalisation of RM647.23 million.