South Korea's second largest automaker Kia Motors said Wednesday it would build a new plant in China to meet growing demand in the world's fastest-growing car market.

Kia's third plant in China, to be built in the northeastern city of Yancheng from late next year, will produce 300,000 cars annually when completed in the second half of 2014, it said in a statement.

The signing of a memorandum of understanding with Chinese officials would be held in Yancheng later Wednesday.

The plant will boost Kia's annual production in China from 430,000 to 730,000 vehicles, it said, adding its market share in China would have dropped to 2.4 percent by 2014 from the current 3.5 percent without the increase.

Kia, which sells mid-size sedans including K5 and a sub-compact vehicle like the K2 in China, saw its year-on-year sales growth there slow to 38 percent last year compared to 70 percent in 2009 amid growing competition.

Kia operates 13 plants in eight countries including India and the United States. It is an affiliate of South Korea's largest automaker, Hyundai Motor. The two together form the world's fifth-largest carmaking group by sales.

"The Chinese market has been the key focus for many global automakers, and this trend has resulted in Chinese customers demanding better cars," Hyundai Automotive Group chairman Chung Mong-Koo said in the statement.

Chung called it "imperative" to win the hearts of consumers in China, forecasting a 14 percent rise in demand next year to 12.7 million vehicles.