A joint venture formed by Chinese automaker Dongfeng Motor Group and Germany's Getrag Group was launched on Wednesday in central China's Hubei Province to produce advanced dual-clutch transmissions, according to the Dongfeng Motor Group.

The new company, Dongfeng Getrag Transmission Co. Ltd, is based in the provincial capital city of Wuhan. Each partner holds a 50-percent stake.

The first phase of the plant, with an investment of 120 million euros(165 million U.S. dollars), is expected to be operational in the first quarter of 2016 with an annual production capacity of 250,000 dual-clutch automatic transmission units.

Its production capacity will gradually grow to 1 million units in the future, according to an agreement signed between the two companies in October 2012.

The first product of the joint venture will be an all-new six-speed dual-clutch transmission.

The transmissions produced by the joint venture will cater for both the domestic and international market. It will also set up a transmission research and development center.

Getrag is one of the world's largest transmission manufacturers, while Dongfeng Motor is one of China's top automakers by sales volume.