APM Automotive Holdings, a Malaysian component manufacturer controlled by Tan Chong group, has entered into a partnership to develop and produce automotive seating in Vietnam.

The company's Vietnam-based subsidiary, APM Automotive IndoChina, has signed an agreement to set up a joint venture with the Thai subsidiary of Japan's Tachi-S Company, according to a filing to the Malaysian stock exchange.

The joint venture will be incorporated in Vietnam as APM Tachi-S Seating Systems Vietnam with an initial capital of US$2.5m. APM Automotive IndoChina will hold 49% of the equity in the joint venture.

APM has a network of component manufacturing plants across south-east Asia and Australia, including automotive seating operations in Malaysia and Indonesia. It also makes interior trim parts, air conditioning, engine cooling systems and suspension parts.

In Vietnam APM already has a company in Ho Chi Min City, called APM Springs (Vietnam) which makes automotive suspension parts.

Tachi-S also has extensive component manufacturing operations across the region, including an automotive seating plant in Vietnam and a seating joint venture with APM in Malaysia. Its Thai subsidiary oversees group operations in India and south-east Asia.

The vehicle market in Vietnam has expanded very rapidly over the last few years, making it an increasingly attractive low-cost manufacturing hub.