Huayu is a subsidiary of SAIC Motor Corp.

Magna will use the joint venture to bring its integrated e-drive system to China. Both companies will collaborate on market development, r&d, advanced manufacturing and purchasing.

The venture initially will supply componentry for the Chinese market, Magna said Wednesday.

"China is the No. 1 growth market in the world, and they have been clear about their intended leadership in bringing hybrid and electric vehicles to market," Magna CEO Don Walker said in a statement.

Magna supplies components for battery-electric vehicles and plug-in hybrids in the United States and Europe. It has produced lithium ion batteries for Ford, and electrified rear axle drives for Volvo.

Magna, of Aurora, Ontario, ranks No. 3 on the Automotive News list of the top 100 global suppliers with worldwide parts sales to automakers of $36.4 billion in 2016.

The company has more than 300 factories and 100 technical centers and sales offices worldwide.