Auto parts supplier American Axle & Manufacturing Holdings Inc. said Thursday it will launch a joint venture with China's JAC Group to manufacture and sell automobile parts for the Chinese market.

The new company, Hefei AAM Automotive Driveline & Chassis System Co., will manufacture and sell rear-beam axles, front axles, power transfer units, rear-drive modules and suspension modules for passenger cars, sport utility vehicles and multipurpose vehicles, American Axle said.

Each party in the deal will own 50 percent of the joint venture, which is expected to begin operations in the first quarter of 2009, subject to Chinese regulatory approval, American Axle said.

Shares of American Axle fell 15 cents, or 5.4 percent, to $2.64 in afternoon trading.