Beijing Hyundai Motor Co started construction on a new plant in Southwest China's municipality of Chongqing on June 23.
The Chongqing plant, which will be Beijing Hyundai's fifth in China and the first in Southwest China, will add capacity to help regain the company's market momentum.
The Chongqing plant is in Yufu Industrial Park in Chongqing Liangjiang New Area and when complete will cover 1.87 million square meters and cost 7.75 billion yuan ($1.27 billion).
The plant is expected to be up and running by 2017 and Hyundai said it will have annual production capacity of 300,000 vehicles and 300,000 engines. Its annual sales revenue is expected to hit 36 billion yuan.
Xu Heyi, chairman of Beijing Hyundai said, "As a joint place of both the Yangtze River Economic Zone and the One Belt, One Road strategies, Chongqing is becoming a city with high economic vitality.
"With perfect facilities, convenient transportation and logistics, low factor costs and great potential, it is becoming the most important economic center as well as automobile industry base in Southwest China."
On April 3, construction work in Cangzhou for Beijing Hyundai's fourth plant began.
The plant cost 7.45 billion yuan and has annual production capacity for 300,000 vehicles and 20,000 engines.
Hyundai said the two plants in Cangzhou and Chongqing, which will start production in 2016 and 2017, will lift the company's production capacity to 1.65 million vehicles.
The company hopes, along with its other plants in Beijing and Hebei province, the additions will help regain market momentum and its rivalries with Volkswagen and General Motors.
With restriction policies on buying cars and issuing license plates in several cities in China, Southwest China is gradually becoming a major "battleground" for various international automobile companies.
Data from Chongqing city government shows that in recent years Southwest China saw a 2 percent to 3 percent annual growth in its automobile market share.
With growing consumption in third and fourth tier cities, the region's automobile market is expected to be quite promising, according to industry experts.
John Edwards, the UK trade commissioner for China, praised Chongqing over its rise as a burgeoning center in intelligent manufacturing.