HEFEI, China—Continental A.G. is moving forward with the Phase 4 expansion of its 6-year-old car tire plant in Hefei, a project that will boost the factory's capacity by 30 percent to 20 million car tires a year. 

Company officials signed contracts in July with local officials, clearing the way for the $294 million project to begin at the 7.2 million-sq.-ft. factory complex in the Hefei State High-Tech Industry Development Zone.

Conti only recently inaugurated Phase 3 production at the plant, a $272 million project that was designed to boost annual capacity to 14 million car and light truck tires and nearly double employment to 2,700 workers. 

The Phase 4 project will add 6 million units of annual capacity for passenger tires, Conti said; the new manufacturing area will cover more than a quarter of the Hefei site's area.

The factory's annual capacity will reach 20 million passenger tires and 5 million two-wheeler tires by 2022. Manufacturing at that rate would yield revenue of nearly $1.5 billion, according to the High-Tech Zone's website. 

This is Continental's fastest-expanding site, Philipp von Hirschheydt, executive vice president, passenger and light truck replacement tires, APAC, said at the contract signing.