The AutoTrader Group has announced a deal with Chinese automotive site Bitauto to acquire a 21.8 percent stake in the company. At the same time, Bitauto’s management is also acquiring a 2.4 percent stake from pre-IPO shareholders.

AutoTrader will spend $58.5 million for the 9 million shares, while Bitauto’s management, namely its chairman and CEO, president, CFO and senior vice president, will spend $6.5 million for their increased stake.

The deal is scheduled to close later this month. With the investment, AutoTrader seems bullish on China’s auto market, which has risen to become the world’s biggest. The China Association of Automobile Manufacturers reported earlier this year that more than 18.5 million cars sold in the country in 2011. Sales are expected to top 20 million this year.

“AutoTrader Group’s leadership as operator of the largest digital automotive marketplace in the United States makes them an ideal partner for Bitauto,” William Bin Li, chairman and chief executive officer of Bitauto said. By bringing together leaders in the two largest automobile markets in the world, I am confident that this cooperation will create significant cooperative opportunities and drive value for both companies in the long term.”

“This investment strengthens our portfolio of companies and establishes the foundation for AutoTrader’s future growth and learning opportunities in emerging markets,” said AutoTrader’s CEO Chip Perry.

Bitauto first went public in 2010 and has steadily lost value over the past couple years. As of early Friday, its market cap was $197 million with a per share price of $5.

AutoTrader filed for an IPO earlier this year with a goal of raising $300 million.

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