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Ford Motor Co. has announced that the Chinese government has approved its new car joint venture with its Japanese unit Mazda and China's Chang'an Motor Corp.

The new venture, to be located in Nanjing, capital of East China's Jiangsu Province, will have an initial annual manufacturing capacity of 160,000 cars, which could be expanded toas many as 200,000 units, Ford said in a statement.

Mazda, in which Ford has a 33.4 percent stake, will have an equity stake in the new venture, Ford said, without elaborating.

Initial investment in the new venture will amount to 4 billion yuan (about 482 million US dollars), China Daily quoted sources from Chang'an as saying on Saturday.

The new venture will use Mazda's manufacturing process as a blueprint to produce a number of Ford and Mazda vehicles, Ford said.

"With Mazda joining us in this new project, we expand our ongoing co-operation that has us building vehicles together on four continents (America, Europe, Asia and Africa). By using a combination of Mazda's manufacturing expertise and Chang'an's deep knowledge of China, we will all benefit," Mark Schulz, Ford's executive vice-president, was cited by the newspaper as saying.

The new venture is part of Ford's plan to invest more than 1 billion dollars in China announced in October 2003 and will be the second plant of the US giant's existing joint venture with Chang'an in southwestern Chongqing Municipality.

Ford's total sales in China, including those of its affiliates Mazda, Volvo, Land Rover and Jaguar, more than doubled last year's from 2003, the newspaper said.

But Ford lags far behind rivals, such as Volkswagen and GeneralMotors by sales in the Chinese auto market.