SGX mainboard-listed China Wheel is investing 780 million renminbi (S$150 million) to build a new plant in Tianjin, China.
About two-thirds of the investment will go towards construction of the plant and purchase of machinery, and the balance will be used for working capital.
This will be China Wheel's third facility.
It will add a capacity of 5 million wheels to its current production capacity of 3.6 million wheels a year.
The new facility will be constructed in three phases.
The first phase is expected to start operation by the end of 2007.