Having declined to comment earlier in the week on unsourced media reports saying it was about to expand its production capacity in China, Ford on Friday said its joint venture - Changan Ford Mazda Automobile (CFMA) - is building a new US$490m factory in Chongqing for completion in 2012.

"The significant investment...underscores Ford's commitment to aggressively expand in the Asia Pacific and Africa region," the automaker said in a statement.

The flexible 1m sq m plant will start with production of the next-generation Focus in 2012 and will later add "a diversified range of products".

Initial capacity will be 150,000 vehicles a year, taking total CFMA output to 600,000 units by 2012.

Over the next three years, Ford will introduce four new model lines in China.

After launching the previous generation Fiesta-based Figo in India earlier in the week, Ford president and CEO Alan Mulally travelled to China to join Chongqing mayor Wang Hongju for the official ground-breaking ceremony for the new plant today.

Mulally said: "Today's announcement reinforces our commitment to the further expansion of our China operations to meet the continued rise in demand from Chinese consumers for world-class Ford products and services."

The JV aims to have 5% of auto market in the country by 2014, up from less than 3 percent currently, Zou Wenchao, executive vice president of the venture told reporters.

"Ford has been talking a rather prudent approach in China over the past years. But the new car assembly plant is obvious a sign that it is speeding up expansion in a market that is too important to miss," Huang Zherui, an analyst with CSM Worldwide, told Reuters.

The new plant - Ford's second in Chongqing and third CFMA JV facility - will be in Chongqing's 'New North Zone' industrial complex.

The next-generation Focus will be launched in January at the Detroit motor show and will be built on the automaker's new global C-car platform, basis of models to be sold worldwide at an annual rate of over 2m by 2012.

The platform eventually will underpin up to 10 unique models. By 2013, C-segment vehicles should account for nearly 28%, Ford expects.

CFMA's existing plant in Chongqing builds the current European-designed Focus and Mondeo car lines and the S-Max minivan. Its other plant in Nanjing makes the Fiesta.

The Changan Ford Mazda Engine Company (CFME) joint venture in Nanjing can make up to 350,000 units a year.

The second Chongqing plant will have a paint shop with Ford's environment-friendly '3-Wet' technology process which improves paint quality, depth and durability, as well as significantly reduceing volatile organic compounds, CO2 emissions and waste.

Ford said it would introduce its EcoBoost engines and other fuel-efficient technologies, such as the 'PowerShift' transmission in China. EcoBoost engines, first introduced in the US and now being rolled out world wide, combine turbocharging and direct-injection technology to reduce fuel consumption and CO2 emissions by up to 20% compared with conventional, larger-displacement petrol engines with similar power output.

Ford plans to be producing 1.3m a year by 2012. Future applications include the Australian Falcon, giving that line its first I4 engine since launch in 1960 and Ford its first rear-drive application for an EcoBoost motor.

PowerShift is an automated manual transmission - common in Europe, these combine a conventional manual gearbox with automatic clutch and gear change operation. Ford claims the technology, which it has offered in Europe for several years on both passenger and light commercial vehicles, delivers the fuel efficiency of a manual with the ease of use of a premium automatic transmission.

Its other partner in China, Jiangling Motors Corporation in Nanchang, produces commercial vehicles including the European-designed Transit, a popular model line first launched world wide outside North America in 1965.