Steering knuckle, which has strict requirements with regard to dimensional precision and quality, is a key component in cars. Conventional plastic forming methods are involved with intricate procedures and high energy consumptions. Normally, a 40 MN hot die forging press or a 100 KJ electro-hydraulic hammer is required to produce the steering knuckle. Closed die forging, which is a new precision forming technology developed in recent years, has some virtues, such as good mechanical properties, easy to form and improving of metal plastic deformation. Aiming at Jetta steering knuckle in this paper, the technology of two forging steps in one heat is presented. This technology is mainly composed of precision pre-forging, which is a closed die extrusion with the extrusion belt, and open finish-forging. The pre-forging process and finish-forging process are numerically simulated using the FEM software DEFORM-3D. For the closed die extrusion forming process, which is the key component of the technology, some key problems were researched, such as the flowing and filling regularity, extrusion-belt length, punch size, punch movement, lubrication and the relationship between the clamping pressure and the extrusion pressure. For the finish-forging process, the flowing and filling regularity of the finish-forging part was studied to verify the correct shape and dimension of the pre-forging part. Numerical simulation with regard to the pre-forging process shows that the closed die forging can not only help to form the pre-forging part, but also decrease the extrusion pressure to be less than 8 MN, extend the mould’s service life and increase the utilization ratio of materials to be more than 75%. Numerical simulation of the finish-forging process shows that the pre-forging part design is rational. In addition, the forging experiments were carried out using the dies designed in particular. The experiments show that the technology is feasible and can markedly improve the mechanical property of the forging piece.