Kia Motors Corp, the Republic of Korea's second-largest carmaker, opened a second factory at its venture in China over the weekend.
The move came as the company tries to reverse its sales slump in the world's fastest-growing major car market.
The 6.8 billion yuan (US$919 million) factory, which can make 300,000 vehicles annually, boosts Kia's total capacity in China to 430,000 units, the company said in a statement on Saturday.
Kia aims to raise its share of China's car market to 8.3 percent by 2010 from its current share of 1.6 percent.
Kia has lost customers to General Motors Corp, which is investing US$1 billion annually in China, and Toyota Motor Corp, which started construction of a new factory in June, Bloomberg News reported.
Seoul-based Kia's sales of locally-made cars in China fell 14.6 percent in the first 10 months, compared with a 24 percent jump in the country's total passenger car sales.
"Kia is losing to American, European and Japanese automakers," said Yu Bing, a Shanghai-based analyst at Pingan Securities Co.
"Automakers have to bring out timely new models in order to maintain their position in the Chinese market."
Kia, an affiliate of Hyundai Motor Co, the Republic of Korea's largest carmaker, builds Optima sedans, Sportage sport-utility vehicles and Carnival multipurpose vehicles in the eastern Chinese city of Yancheng, Jiangsu Province.
It plans to add one or two new models each year.
The new factory, which has an average automation rate of more than 90 percent, is equipped with the most advanced technologies in the world, according to the statement. Upgraded Cerato sedans and Cerato hatchbacks will be assembled at the plant.
Kia's Chinese venture Dongfeng Yueda Kia Motors Co Ltd is owned by Kia, Dongfeng Motor Corp and Jiangsu Yueda Investment Co.
Dongfeng Motor and Jiangsu Yueda each own 25 percent of the venture.