Mainland vehicle parts manufacturer and exporter Norstar Founders aims to generate 20 per cent of its revenue from the mainland market in two to three years, its financial controller said. The Anhui-based company, which listed on the Hong Kong main board last year, also plans to raise its capacity to US$400 million worth of vehicle parts by 2006, from about $300 million now, according to Zhang Zhenjuan. 'In previous years, we didn't pursue domestic market opportunities because of the low-quality requirements for vehicle parts in the domestic market and high risks from account receivables,' Ms Zhang said. 'But selling in the domestic market can actually give us a higher profit margin then we currently enjoy.' The expansion plan would also be driven by the expected phase-out of the nation's tax rebate programme and an increase in Norstar's production capacity beyond the level needed to satisfy demand from international clients. Norstar, which produces spare parts for vehicles - mainly brake systems components - generated almost its entire 1.7 billion yuan turnover from sales to North America and Europe in the year to March. The company has told analysts of plans to break into China and Japan, respectively described in an April Citigroup report as the world's fastest growing vehicle market and second-largest vehicle parts market globally. In April, Norstar signed a deal with Japanese trading conglomerate Itochu to distribute vehicle parts in Japan. Since then, Itochu has indicated its intention to acquire a stake in Norstar, which is controlled by chairman Lili Huang, according to Norstar chief executive Zhou Tianbao. 'Itochu has had several discussions with me, trying to persuade us to sell an equity stake to them,' he said. 'But we've been very cautious.' Mr Zhou said Itochu was interested in making a multi-million-dollar equity investment.