Ford and its Chinese partner announced Friday they will build a third plant in China as the US automaker struggles to improve its weak performance in the world's strongest market.

Ford will run the new 490-million-dollar 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 in a statement.

The plant, due to open in 2012, will produce Ford's Focus compact car with an initial capacity for 150,000 vehicles a year, the US auto giant said.

The one-million-square-metre facility will boost Ford's and Mazda's combined annual production capacity to 600,000 vehicles from 447,000 in China -- where it is lagging behind US rival and 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 number 12 in terms of sales in China, according to analysts J.D. Power and Associates, lagging far behind GM, Volkswagen AG, Hyundai Motor Company and Toyota Motor Company -- China's top four automakers by sales.

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

China's total vehicle sales, helped by Beijing's efforts to stimulate domestic consumption, outstripped those of the United States 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 percent year-on-year, according to the China Association of Automobile Manufacturers.