Magneti Marelli and Shanghai Automobile Gear Works (SAGW) have inaugurated their new joint venture plant in the industrial automotive district of Jiading, just outside Shanghai.

The joint venture, called Smmp (SAIC Magneti Marelli Powertrain) will produce hydraulic components for Magneti’s Freechoice automated manual for the Chinese market.

It will supply components for approximately 300,000 Freechoice tranmissions a year and will employ about 450 workers when operating at full capacity. It will also have its own research and development centre.

Freechoice is an electro-hydraulic automation mechanism of the manual transmission managed by an electronic control system to reduce fuel consumption and emissions. It is cheaper to produce that many other types of automatic transmissions.

The technology has already been adopted by 16 international carmakers, six of them Chinese.

In China, automatic transmissions, including CVT, dual-clutch and AMT are already popular and the market is expected to grow to a share of about 33% by 2015 according to Global Insight.

Demand in the B segment is projected to reach 250,000 units and about 46,000 in the C segment.