Toyo Tire & Rubber Co. announced it will invest $9.8 million to establish a wholly-owned subsidiary company at Zhangjiagang City, Jiangsu Province, China, to manufacture passenger and light truck tires.

Last summer, the tiremaker said it planned to build a new tire plant in China, and this new subsidiary is expected to meet the growing demand for tires generated by the rapid growth in automobile use in China, Toyo said. Jiangsu Province is be the ideal location to establish the new factory because it already has the necessary infrastructure, work force, and logistical support.

The subsidiary, Toyo Tires Zhangjiagang Co., Ltd., will be established in April, with operations commencing by the end of 2011. Initial production capacity during the first phase will be 2 million units of passenger and light truck tires. The factory will employ about 500 people, according to Toyo.