Ford will run the new $490 million plant in southwestern Chongqing through Changan Ford Mazda, its joint venture with Chongqing Changan Automobile Co and Japan’s Mazda Motor Corp., the company said.

The plant, due to open in 2012, will produce the compact Ford Focus with an initial capacity for 150,000 vehicles a year.

The 1 million-square-meter facility will boost Ford’s and Mazda’s combined annual production capacity from 447,000 to 600,000 vehicles in China, where it is lagging behind local market leader General Motors, Ford said.

GM’s partnerships and joint ventures give it a total capacity of 1.29 million vehicles a year, including low-cost micro vans.

Ford ranks No. 12 in terms of sales in China, according to analysts J.D. Power and Associates, lagging far behind GM, Volkswagen AG, Hyundai Motor Co. and Toyota Motor Co.— China’s top four automakers by sales.

Ford sold 197,212 vehicles in the first half of the year, up 14% from a year earlier, but the growth was dwarfed by GM, which shipped 814,442 units in the same period, up 38% year on year.

China’s total vehicle sales, helped by Beijing’s efforts to stimulate domestic consumption, outstripped those of the U.S. for the first time in January—making the Asian giant the world’s largest car market.

Total vehicle sales in China for the first half of the year were 6.09 million units, up 17.7% year-on-year, according to the China Association of Automobile Manufacturers.