Chinese automobile manufacturer Geely Automobile Holdings Ltd said it has signed an agreement to buy troubled Australian car parts maker Drivetrain Systems International Pty Ltd.

Drivetrain Systems, a supplier to Ford Motor Co, Chrysler, and South Korea's Ssangyong Motor Corp, mostly produces four-speed and six-speed automatic transmissions with an annual output of 180,000 units. It filed for bankruptcy protection in February after "some of its clients were severely impacted by the financial crisis," Geely said in a statement.

Executives of both companies attended the signing ceremony held at the government house of New South Wales, Australia.

The company did not provide any financial details of the deal, and only said it had the support of both the Australian and Chinese governments.

Under the deal, Geely Auto will provide the much-needed fund support to Drivetrain Systems to help it resume normal business operation and expand R&D activities.

The purchase will strengthen the Chinese auto maker's gearbox production line, and improve production and engineering capabilities for its own automatic transmissions, Geely said.

Zhejiang-based Geely is one of China's largest independent carmakers, and the first Chinese auto maker to make an overseas acquisition during the financial crisis.

The announcement came after Geely Automobile suspended trading of its shares in Hong Kong on Friday morning.

Drivetrain Systems is one of the two biggest independent automotive transmission manufacturers in the world serving clients for more than 80 years.

Geely said it plans to introduce Drivetrain Systems' products to Chinese auto makers and help it find low-cost Chinese suppliers to revive the company.

It would also offer financial assistance to the Australian firm to develop new products and keep its leading position in the global market.

Drivetrain Systems is also developing the eight-speed AT, duel-clutch transmission and CVT transmission.

Geely is one of the Chinese car makers that have considered the acquisition of struggling overseas counterparts during the global financial crisis as they strive to secure advanced technologies and access to new markets.

There were reports that Geely had held "preliminary discussions" with Ford about buying its money-losing Swedish unit Volvo, but the company declined to comment on the issue.

Li Shufu, chairman of Geely, said the Chinese automaker was open to possible overseas deals. He told reporters his company was following the turmoil in the industry, and studying the restructuring, potential bankruptcies and possible mergers.

"Geely is paying close attention," Li told reporters

"If there is an opportunity we will participate" in those events, as long as it is in the interests of Geely's shareholders and the company's long-term development, he said

However, overseas purchasing has drawn warnings from the state government which said Chinese auto firms still lack experience in running international brands and also lack capital.

The company aims to boost vehicle sales by 25 per cent to 250,000 cars this year, said  Shufu. It aims to sell 2 million vehicles by 2015, with two-thirds of the products sold overseas.

Geely will introduce eight models, including its first mid-to-high class sedan, to its product line-up this year. Two new models will roll off assembly lines each quarter, it said.

The company said  total sales volume of the group's five 91 per cent-owned subsidiaries was 37,137 units in the first two months of 2009, up 4 per cent over the same period last year.