Faurecia will take an 18.8 percent holding in the capital of Xuyang Group through a reserved capital increase, it said in a statement. The deal will broaden Faurecia's product range, with complete seats, interior systems, stereos and interior trim.

Seats: The partners will form a joint venture called Changchun Faurecia Xuyang Automotive Seat Co. to produce complete seats. Faurecia will own a 60 percent stake in this venture.

Interior systems: Faurecia will convert its factory in Changchun into a joint venture with Xuyang, and the French company will hold a 60 percent stake.

Acoustic modules and interior trim: Xuyang specializes in these product segments. Xuyang will use its assets to form a joint venture with Faurecia, in which the Chinese company holds a 60 percent stake.

Xuyang Group is majority owned by the municipality of Changchun, in Jilin Province.

The city of Changchun also is home to FAW, China's second-biggest carmaker and a major customer of Xuyang.

Last year, FAW and its joint ventures with Volkswagen AG, Toyota Motor Corp. and General Motors Co., produced 1.5 million vehicles. FAW is targeting production of 2 million units in 2011 and 3 million units in five years.

Faurecia operates 17 plants and four technical centers in China, employing 4,000 workers. Last year, the French supplier China operation generated sales of 670 million euros ($842 million). The company is targeting annual sales of 1.7 billion euros in China by 2014.

Faurecia ranks No. 7 on the Automotive News Europe list of the top 100 global suppliers, with sales to automakers of $13 billion last year.