Chinese electric vehicle giant BYD has agreed to a deal with Forvia to supply its second European factory located in Türkiye, the French car parts supplier announced on Monday.

The world’s seventh largest car parts supplier by revenue, whose Chinese sales account for a quarter of total revenue, Forvia is a long-time partner of BYD, and has already secured deals with the automaker’s first European factory in Hungary.

Türkiye and BYD announced in July that the carmaker would build a $1 billion production plant in Türkiye with an annual capacity of 150,000 vehicles.

BYD’s electric and rechargeable hybrid car production facility, which is planned to start production in western Manisa province at the end of 2026, is envisaged to employ up to 5,000 people directly.

Forvia produces a range of products that include interior solutions, safety and lighting systems, mobility and powertrain systems, software, hardware and interface products, as well as sustainable composite components.

The company has also reached deals with Chinese auto manufacturers Chery, which is also said to be close to completing a process for a factory investment in Türkiye, and Li Auto.

During a recent annual conference in Wuhan, Chery International President Zhang Guibing presented the carmaker’s latest developments and future strategies, showcasing its European manufacturing bases, which included Spain, Italy and Türkiye.

Alongside Chery, Türkiye has also been in talks with state-owned SAIC Motor, which owns MG Motor.

Forvia’s shares jumped nearly 10% on Monday as it also announced it had reached an agreement with another Chinese automaker, Xiaomi.

The company is hoping new contracts with Chinese manufacturers will offset ailing auto demand from domestic manufacturers.

“Forvia’s ability to secure business with BYD outside China is reassuring as it helps to mitigate the fears that Chinese automakers will not use international suppliers such as Forvia in their expansion of their footprint into Europe,” said Stephen Reitman, an analyst at Bernstein.

The contract with Xiaomi marks Forvia’s first with the tech group that first announced its entry into the EV business in 2021 as a diversification from its core smartphone operations.

Xiaomi started shipping its SU7 electric vehicles in early April.

“Xiaomi is one of the key telecom companies entering now the EV and car market and it’s very good that we are able to extend our reach with Chinese manufacturers also with the latest ones,” Forvia’s finance chief Olivier Durand said on an investor call.