ZF Friedrichshafen is establishing a third Chinese research and development centre in southern China's Guangzhou.
Officials and local authorities have signed an agreement and the supplier plans to spend EUR90m there.
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ZF already has two R&D units in China, both in Shanghai. With their respective focus on the development of active and passive safety technology as well as driveline and chassis technology, they support customers in Asia-Pacific.
ZF said the "massive" expansion of future technology such as automated driving and e-mobility had created additional demand for engineering which it was addressing.
Holger Klein, chief of the Asia-Pacific region, said: "The new center will develop key technology and systems we can also use in other market regions."
The Guangzhou unit should be operational by 2023 and will also be home to a satellite of the Shanghai-based R&Ds to serve customers in southern China.
It will develop future mobility software and systems.
