South Korean car maker Kia Motors, controlled by Hyundai Motor, has agreed with two Chinese partners to spend US$790 million in building a new plant for their car joint venture, the venture told China Daily yesterday.

The new plant, to be located in Yancheng in East China's Jiangsu Province, will increase the tripartite venture's annual manufacturing capacity to 430,000 cars from the present 130,000 units, the venture said in a statement.

Kia has a 50 per cent stake in the venture. Both Dongfeng Motor - one of China's biggest automakers - and Yueda, an industrial group in Jiangsu, hold 25 per cent.

The new project, defying the slowing car market and growing over production capacity in China, is an important part of Hyundai's aggressive expansion in the nation.

Hyundai aims to increase its car output in China to more than 1 million units and control 20 per cent of the nation's car market by 2010, Hyundai Motor (China) Investment Co Ltd said last month.

Hyundai also expects to report more than US$20 billion in sales revenues in China by 2010.

Kia's joint venture, set up at the beginning of 2002, sold 26,000 cars in the first four months of this year, a little less than a year earlier.

The venture's sales surged almost 160 per cent to 56,100 cars in the first quarter of this year from a year ago.

The venture will also launch a Tucson sport utility vehicle (SUV) in the first half of this year.

Hyundai clinched a deal with Jianghuai Automobile Corp in East China's Anhui Province at the end of last year to form a commercial vehicle joint venture with an investment of US$783 million and an annual production capacity of 100,000 units.