Volkswagen’s car making joint venture in north China with FAW has agreed to take over a subsidiary from FAW Group for 502.35 million yuan.

FAW had put up its subsidiary in the western city of Chengdu for sale at the Tianjing Property Rights Exchange last month.

But the spokesman with the Chinese auto group told Reuters the two sides had already reached a deal before the public auction but needed to go through official procedure as required by regulators.

FAW’s Chengdu unit made a net profit of 354.66 million yuan in 2008 but no capacity information was provided, Reuters said.