UK supplier GKN Powder Metallurgy is investing 8.7 million pounds (about 11 million euros) to build a new factory at its Danyang site in China.
The 20,000-square-meter plant will be completed in September 2015.
The existing factory in Danyang, built in 2006, produces powdered metal components used in engines and transmissions.
GKN also announced it has opened a plant in Yizheng. The factory produces small precision components for engines, bodies and chassis. By the end of this year, the Yizheng plant will employ 80 workers.
The company, which employs 6,600 workers worldwide, has 34 factories in 10 countries and is headquartered near Birmingham, England.