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FRANKFURT (Reuters) - Chinese car maker SAIC Motor Corp Ltd and German chipmaker Infineon Technologies AG agreed to set up a joint venture to make power modules for the Chinese electric vehicle market, the companies said on Friday.

The joint venture, to be named SAIC Infineon Automotive Power Modules and headquartered in Shanghai, will make the power modules at Infineon’s plant in Wuxi, China, they said.

Volume production is due to start in the second half of 2018. SAIC Motor will hold a 51 percent stake in the joint venture, while Infineon will own the rest.

“Our joint venture will make us faster to serve the electric vehicle customers in China,” said Jochen Hanebeck, a board member of Infineon, which supplies chips to control the batteries and motors in eight out of 10 of the world’s top selling electric vehicles.

Although China’s auto market slowed sharply in 2017, an industry body said earlier this year sales of new energy vehicles (NEV) would likely grow by 40 percent in 2018, topping 1 million vehicles.