The world's No 1 automotive supplier, Bosch, on Friday unveiled plans to sink 160 million euros (US$203 million) into its car parts plants in Changsha and Suzhou, in a drive to increase production capacity.

And company bosses said the investment was only the tip of the iceberg, with plans to invest a total of 620 million euros (US$787 million) in China over the next two years.

The German industrial giant will pump 60 million euros (US$76 million) into its Changsha plant, the company's largest investment in Central China.

The expansion will make the Changsha site Bosch's Energy and Body Systems Division's main base in the country.

Meanwhile, a total investment of 100 million euros (US$127 million) over the next two years, will see the workforce at the company's Suzhou site grow from 160 to 1,000 by 2008.

The Changsha plant already covers the entire sector of vehicle electrical systems from development to manufacture and distribution, while the Suzhou site manufactures a range of Bosch automotive electronic components including airbag control units, engine management units for diesel engines and various other electronics.

"The latest expansions are part of our plan to invest a further 620 million euros (US$787 million) in China between 2006 and 2008," said Bosch board member Rudolf Colm. "Through continuous investment and localization we will introduce the most advanced technologies and manufacturing know-how to China and hence support China's need for global industrial competitiveness, environmental protection and resource-saving."

Up until 2005 Bosch had invested around 620 million euros (US$787 million) in its Chinese bases. And the past five years alone have seen the number of Bosch manufacturing facilities double, rising from 10 to 20.

Last year saw sales of 1.2 billion euros (US$1.53 billion) in China, a 15 per cent increase from 2004.

Today all of Bosch's business sectors operate in China, with plants producing everything from automotive, industrial technology and building technology to consumer goods.

The company also owns 14 subsidiaries, six trading companies and has invested in six more joint ventures in China.

Friday's announcement follows Bosch's opening of a 200 million euro (US$254 million) development and manufacturing facility in Wuxi, Jiangsu Province, in November last year.

"Our aim is to develop more and more products in China that are tailored to the requirements of our local customers," said Dr Volkmar Denner, board member responsible for automotive electronics and energy and body systems.

In order to meet the growing customer demand, the company also aims to increase its presence in the Chinese market.

"Presently China accounts for 3 per cent of our global market. Our target is to increase that to 5 per cent by 2008," said Colm.

He added that in 2008 China will surpass Japan, becoming the company's largest market in Asia.

While by 2006 China is expected to become the world's third largest auto producer surpassing Germany and following only the United States and Japan.