Hyundai Motor has commenced production at its fifth passenger car assembly plant in China.

The automaker said it built the new factory to "meet the demands of the fast growing new car market in inland China".

The new plant in Chongqing, a joint venture with Hyundai Motor's local partner Beijing Automotive Industry Holding, has annual capacity of 300,000 units and will increase local production of SUVs, the fastest growing segment in China. 

This latest factory gives Hyundai China annual capacity of 1.65m passenger vehicles in the world's biggest market.

"The creation of the new facility will also enable Hyundai Motor to maximise the significant and expanding sales opportunity across south-west China, part of the country where development has been accelerated by the Chinese government's Belt-Road initiative," the automaker said in a statement.

The plant will be opened officially in August and will first build a small sedan aimed at younger buyers. The plant is expected to produce 30,000 vehicles by the end of 2017 and will build four models by the end of 2019 – two small sedans and two compact SUVs.

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Hyundai plans to introduce three to four new models every year, expanding the current line-up of 12 to 14 by 2020. By then the company will have seven SUVs in production compared with four in 2017. 

Six 'eco-friendly' models will be introduced by 2020. This starts with the introduction of an electric Yuedong sedan by the end of 2017 followed by the plug-in Sonata in the first half of 2018.

Hyundai Motor and Beijing Automotive have jointly spent US$1bn on the purpose-built plant, which has floor space of 298,000 sq m and is on a 2.03m sq m site. The facility will also improve Hyundai's local design and R&D capabilities.

Hyundai started producing automobiles in China at Beijing Hyundai Motor Company (BHMC) in October 2002.