The main building of Bosch in Dresden, eastern Germany.
New Delhi CNN  — 

Bosch, the German engineering and technology company, is planning to invest $1 billion to make components for new energy vehicles in China, the world’s largest car market.

The company plans to build a research, development and manufacturing facility for parts for new energy vehicles and automated-driving technology in Suzhou, a city in the country’s east, Bosch said in a statement on Thursday.

It plans to invest around $1 billion in the project over the next years, the statement added. The first phase of the new facility is expected to be completed by mid-2024.

“China is the world’s largest auto market, full of promise and vitality. As a multinational enterprise, we need to make full use of the country’s local R&D capability and production capacity,” Stefan Hartung, chairman of the board of management of Bosch, said in the statement.

Bosch has had a presence in China since 1909 and employs around 55,000 people in the country.

The announcement comes two months after German Chancellor Olaf Scholz visited China with a team of top executives. This was the the first visit by a G7 leader to China in roughly three years.

While some in Scholz’s coalition government are growing nervous about Germany’s economic ties with China, Berlin is hardly in a position to rock the boat with Beijing as it grapples with the challenge of reviving its struggling economy.

Its consumers and companies have borne the brunt of Europe’s energy crisis, and a deep recession is looming.