Like its two existing Beijing plants, the third plant will be operated under Beijing Hyundai Motor Company Corporation - Hyundai's tie-up with State-owned Beijing Automotive Industry Holdings Co.

The new plant is expected to produce more medium- and high-end cars and SUVs.

The two partners will invest 6.5 billion yuan ($975 million) in the plant and plan to build Hyundai's largest and the most advanced plant outside Korea, Beijing Hyundai said in a statement.

The third plant, with an annual capacity of 400,000 vehicles, will start operation in July 2012, boosting Hyundai's capacity to 1 million units in China.

Hyundai has been struggling with insufficient capacity since last year after opening its second plant in China.

The capacity utilization rate is normally 75 percent overseas, yet Beijing Hyundai is using 95 percent of its capacity.

Beijing Hyundai, the country's 5th largest passenger vehicle maker, sold 570,300 cars in 2009, but its capacity then was only 600,000 units.

It plans to sell 670,000 units this year.

Independent auto analyst Zhang Yu told the Global Times keeping machines running without allowing down time for maintenance is quite risky as product quality cannot be ensured.

Hyundai's third plant will help Beijing Hyundai avoid relying too much on its two main compact models, the Elantra and its redesigned Elantra named Yuedong, independent auto analyst Jia Xinguang told the Global Times.

After launching onto the China market with the Elantra in 2003 and the Yuedong in 2008, Beijing Hyundai has rolled out several model years for both vehicles.

But the two models have always been the company's best sellers, contributing nearly 60 percent to the company's sales over the first 10 months of this year.

Industry analyst Jia said Hyundai's success in selling medium-sized sedans includ-ing the Sonata would a lay solid foundation for its success in China. The Sonata did the best in side and rollover crash tests earlier this month, according to US National Highway Traffic Safety Administration tests.

The revamped Sonata, which entered the US market in January, outsold both Nissan's Altima and Ford's Fusion last month.