NEW YORK (TheStreet) -- Auto component supplier American Axle & Manufacturing ( AXL ) stock was jumping after the company announced a joint venture with Saab Automobile to deliver components that improve vehicle fuel efficiency.

Shares of American Axle & Manufacturing have jumped 4% to $9.20 in late morning trading.

The new company, e-AAM Driveline Systems AB (e-AAM), will engineer, develop and commercialize electric all-wheel-drive and hybrid driveline systems for passenger cars and crossover vehicles, American Axle said in a press release.

The company described the e-AAM systems design as one that would improve fuel efficiency, reduce carbon dioxide emissions and provide vehicle stability.

e-AAM will be headquartered in Trollhattan, Sweden and begin operations on Oct. 1. It will be majority- controlled by American Axle.

e-AAM systems will be featured in the next generation of Saab vehicles beginning in 2012, American Axle said.

American Axle & Manufacturing "is pleased to be launching this exciting new business opportunity with Saab," AAM CEO Richard Dauch said. "e-AAM will leverage the outstanding competencies of both our companies in the development of state-of-the-art electric and hybrid driveline systems needed by global OEMs to improve the fuel efficiency, ride and handling performance and overall capability of their products. "

-- Written by Andrea Tse in New York.

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