The new plant, also known as the Tiexi plant, is scheduled to start production in 2102 with an initial capacity of 100,000 units a year. The venture will expand production capacity up to 300,000 units in the long term as sales rise, BMW said in a statement.

The new facility will include metal-stamping, body-welding, a paint shop, and a final assembly line. The partners also will build an engine plant, a logistics center and a vehicle test facility. The venture's investment will exceed 5 billion yuan ($732.1 million). BMW and Brilliance each will contribute half the investment.

The existing plant, known as the Dadong plant, currently builds the BMW 3 series and 5 series. It has an annual capacity of 41,000 units. BMW plans to build a long-wheelbase version of the BMW 5 Series sedan in the Dadong plant starting in the third quarter of this year.

BMW is China's second largest luxury brand, behind Audi AG. BMW's Chinese customers tend to be business executives ranging from 30 to 40 years old, said BMW Chairman Norbert Reithofer at the Tiexi plant's groundbreaking ceremony held Tuesday.

In 2009, more than 90,000 BMW-brand cars were sold in China, which is BMW's third largest market, behind the United States and Germany. In the first fourth months of 2010, BMW sales have doubled. This year, the company is targeting sales of 120,000 units in China.