Fiat reportedly will cooperate with Guangzhou-based GAC Group and Hangzhou Advance Gearbox Group to build a new factory producing twin clutch automatic transmissions.

Fiat has agreed to invest CNY2.3bn (US$337.4m) in the new project, nddaily.com reported, according to Gasgoo.com. 

The new factory's output will be used for Fiat vehicles, including the upcoming C-Medium, and will begin operation in 2013 at the earliest.

GAC Group bought Hangzhou Advance from Nanjing Auto in mid-2009. The company has annual production volume of over 500,000 gearbox systems.

Fiat reportedly hopes to sell 300,000 vehicles in China in 2014, 2% of the total market.