Changan Ford Mazda Automobile Ltd. has signed a memorandum of understanding with the Chongqing municipal government to build the plant, Ford said Thursday.

The joint venture, which includes Ford, Mazda Motor Corp. and Chongqing Changan Automobile Co., will invest $350 million (2.3 billion yuan) in the project. Construction will begin in July.

The plant will make six-speed automatic transmissions and is scheduled to start production in the fourth quarter of 2013. It will have an initial annual capacity of up to 400,000 units for Ford-brand vehicles made and sold in China, Ford said.

The factory will be located in Chongqing's New North Zone.

"This transmission plant investment represents yet another important milestone in Ford's accelerated growth plan for this important market," said Joe Hinrichs, president of Ford Asia Pacific.

Ford, which sold 582,500 vehicles in China last year, is pushing to catch up to rival and market leader General Motors Co., which plans to double its sales in China to 5 million vehicles by 2015.

In April, Ford announced it would introduce 15 new vehicles in China, double its dealerships from 340 and add 1,200 new jobs in China by 2015.

Later this year, Changan Ford Mazda will launch construction of a new 3.3 billion yuan engine plant in Chongqing. The factory, with an initial annual capacity of 400,000 units, will launch production in 2013.