The investment is part of an agreement signed between the Chinese carmaker and the Ningbo Hangzhou Bay New Area government.
The project is claimed to be the carmaker’s largest powertrain unit in China and is expected to be completed by the end of 2015.
Xinhua News reported that the new facility is expected to have an output capacity of 700,000 units of turbocharged engines per year, in addition to 300,000 units of advanced high-performance transmissions.
Additionally, a new Geely-Volvo China design and test center is also planned to be built in the Hangzhou Bay New Area.
Recently, the company has acquired UK-based taxi maker Manganese Bronze for $17.44m and it will invest about $130m in the taxi maker over the next five years.