Johnson Controls said it was forming a joint venture with Binzhou Bohai Piston, an auto parts affiliate of Beijing Automotive Industry Group, to build its fourth Chinese automotive battery factory.
The JV will supply automakers and the aftermarket customers and will be in Binzhou, Shandong province.
At full capacity, the US$200m plant will employ 650 people making conventional flooded and absorbent glass mat (AGM) batteries. AGM powers start-stop systems, which increase vehicle fuel efficiency up to 5%.
By 2020, 50%, or about 15m new vehicles in China will have start-stop, saving, according to JCI, an estimated 1.2bn litres of petrol per year. It is claimed also to reduce greenhouse gas emissions by 2.8m tonnes per year.
Construction is expected to begin in 2017 with production two years later. The plant will be able to produce 7.5m batteries per year.
Joe Walicki, president, Johnson Controls Power Solutions, said: "This joint venture is a strategic move to position [the JV partners] to take advantage of what will be the world's largest automotive battery market by 2020."
"In the China market there is strong demand for auto part technologies that can improve fuel efficiency and there will be rapid growth for AGM batteries in start-stop vehicles," said Han Yonggui, BAIC Group director and chairman of Beijing Hainachuan Automotive Parts.
Approximately 23.5m new vehicles were produced in China in 2015, making it the world's largest automotive market. In 2015, Johnson Controls said it would build a new battery manufacturing facility in Shenyang, China. It is expected to start operations in 2018. The supplier also has battery plants in Chongqing and Changxing, and an energy storage research and development centre in Shanghai.