U.S. auto-parts supplier ArvinMeritor Inc. will form a joint venture with Chinese auto maker Chery Automobile Ltd. to build chassis systems, The Wall Street Journal reported Wednesday.

The deal will not only help ArvinMeritor to boost its Asian sales, but also give the U.S. company a larger foothold in the rapidly growing Chinese automotive industry and a low-cost base to develop and build chassis systems, said the report.

While the joint venture will focus on serving Chery at first, ArvinMeritor is the majority owner with a 60 percent stake, and the venture can eventually serve other auto makers, according to the report.

The joint venture, ArvinMeritor Chassis Systems Wuhu Co., will evolve into a business with 150 million U.S. dollars in annual revenue by 2010, the company said. ArvinMeritor will provide design, engineering and manufacturing support, and production will begin in 2008.