It has signed an agreement with Changzhou National Hi-Tech District that includes land use rights to more than 160 acres.
The wholly owned $100M plant will have a capacity of 120kt/y and is expected to be commissioned in late 2014.
Located in the Changzhou National Hi-Tech District, the new site is close to rail lines, the Changzhou deep-water port on the Yangtze River and other business and commercial infrastructure.
The company plans to ship rolled aluminium coils manufactured at its South Korean operations to the new facility in Changzhou for heat treatment and finishing before delivery to automotive customers within China as well as to export markets.
Current Novelis auto sheet customers include Audi, BMW, Chrysler, Ferrari, Ford, GM, Hyundai, Jaguar, Land Rover, Mercedes-Benz, Porsche and Volvo
Novelis expects demand for aluminium in the global automotive sector to grow at a compound annual rate of 25% over the next five years as auto manufacturers look for ways to make their vehicles more fuel-efficient.
As previously announced, to meet growing demand in North America the company is expanding its footprint there with a $200M project to increase automotive sheet capacity by 200kt/y.
Erwin Mayr, Senior Vice President and Chief Strategy and Commercial Officer for Novelis said: "Within Asia, China will have the highest demand growth for flat-rolled aluminium products.
"In addition to automotive, we expect Asian demand for aluminium used in beverage cans and consumer electronics to more than double by 2020."
