Chery Automobile, partner of Chrysler and Fiat in China, will enter into a $370-million joint venture with an Iranian auto company to make cars in the Middle East country.

A statement issued on Friday by the seventh largest Chinese auto group, based in the eastern city of Wuhu, said it would hold 30 percent of the stakes in the venture. Iran Khodro, the biggest carmaker in the oil-rich nation, will own 49 percent, and Canadian auto parts designer Solitac the rest.

The factory to be set up in the northern Iranian city of Babol will start operations nine months later and can assemble up to 200,000 Chery QQ6 micro cars a year, Chery said.