The new factory, in the southwest city of Chongqing, is expected to have an initial capacity of 100,000 units per year and may eventually be increased to 300,000 units, the official Xinhua news agency said, without citing a source.

Ford currently produces sedans including the Focus and Fiesta in China through Changan Ford Mazda, a joint venture with Chongqing Changan Automobile Co and Japan's Mazda Motor.

Officials at Ford and Chongqing Changan declined to comment on the reports.

The new plant's construction will begin Friday and it is likely to start operations by the end of next year, Zhang Baolin, general manager of Chongqing Changan Automobile Co was cited as saying by Chinese web portal Sina.com.

The new plant, which would add to the US giant's existing two in Chongqing and Nanjing city in eastern China, will focus on production of high-end sedans and sports utility vehicles, the Xinhua report said.

The two existing plants have a combined annual capacity of 447,000, according to previous reports.

Despite the strong Chinese market, Ford's growth here has been slower than its rivals such as General Motors. Analysts say Ford does not rank among the top 10 car manufacturers in China.

It sold 197,212 vehicles in the first half of the year, up 14 percent from a year earlier but the growth was dwarfed by GM, which shipped 814,442 units in the same period, up 38 percent from a year earlier.

China's total vehicle sales outstripped those of the United States for the first time in January, to make the Asian giant the world's largest car market, helped by Beijing's efforts to stimulate domestic consumption.

Total vehicle sales in China for the first half of the year were 6.09 million units, up 17.7 percent year on year, according to the China Association of Automobile Manufacturers.

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