Ford Motor Co, a relative latecomer in China, yesterday opened a 160,000-unit car plant in this eastern city as part of its catch-up plan in the world's second-biggest and fast-growing vehicle market.

The second factory of the Detroit carmaker's joint venture with its Japanese unit Mazda Motor Co and Chang'an Motor Corp, the No 4 Chinese auto group, will start to assemble a Mazda2 subcompact next month and a Ford small-sized model next year.

The move comes five months after the three parties opened a 350,000-unit engine plant in Nanjing to mainly feed domestic car production.

Alan Mulally, Ford's president and CEO, said annual production capacity at the new plant could be raised to 300,000 units swiftly to meet mounting demand in China.

Total investment in the plant will reach 3.84 billion yuan, said a Ford press release.

The tripartite car venture, in which Chang'an, Ford and Mazda hold a 50, 35 and 15 percent stake respectively, is making the new Ford Mondeo and Focus, Mazda3 and Volvo S40 at a 250,000-unit facility in the western municipality of Chongqing.

Ford began car production in Chongqing in 2003. Its sales in China are growing rapidly but still lag far behind current market leaders Volkswagen and General Motors.

In the first eight months of this year, retail sales of Ford and its affiliate brands - Volvo, Jaguar, Land Rover and Lincoln - surged 29 percent year-on-year to 126,918 units.

Meanwhile, overall vehicle sales in China rose by a quarter to 5.69 million units.

Asked if Ford will export China-made small cars to other markets, Mulally said: "We will continue to look into that."

But he stressed the group's current priority is to satisfy demand in China, where there will be "tremendous market growth."

Chrysler in July reached an agreement with another Chinese carmaker, Chery Automobile, to make small cars in China under badges from the U.S. company for American and European markets, a move aimed at taking advantage of low costs in China.