Hyundai Motor Co., South Korea's top carmaker, began construction of its fourth plant in China on Friday, as it seeks to ease its capacity constraints and expand sales in the world's largest auto market.
  

The Hyundai plant in the city of Changzhou, in the northern Chinese province of Hebei, will start producing vehicles with an initial annual capacity of 200,000 units, with Hyundai planning to eventually increase the annual production capacity to 300,000 vehicles.
  

Hyundai decided to build the plant in Changzhou, about a two-hour drive from the capital city of Beijing, in line with a push by the Chinese government to better integrate Beijing and Hebei province.
  

"I am pleased that Hyundai Motor began construction of the Changzhou plant in Hebei province, which will become a new growth engine of the Chinese economy in line with China's new development strategy for Beijing and its neighboring areas," Hyundai Motor Vice Chairman Chung Eui-sun said during a ground-breaking ceremony.
  

Chung said Hyundai's joint venture in China has become a "symbol of economic cooperation between Korea and China" and the Changzhou plant will help Hyundai continue to expand sales.
  

In a separate speech, South Korea's Ambassador to China, Kim Jang-soo, congratulated the start of construction on the Changzhou plant.
  

Kim also said relations between South Korea and China became closer as Seoul applied to join a Chinese-led infrastructure bank in Asia.
  

"With South Korea joining the Asian Infrastructure Investment Bank, relations between Korea and China became friendlier," Kim said.
  

Hyundai's capacity expansion comes as vehicle sales in China slow, hit by a cooling Chinese economy.
  

In the first two months of this year, Hyundai sold about 177,000 vehicles, down 6.3 percent from the same period last year.  
  

Hyundai aims to complete construction of the Changzhou plant by the end of 2016 with an annual capacity of 200,000 vehicles. It will expand the annual production capacity to 300,000 vehicles by the end of 2018, the South Korean carmaker said in a statement.
  

This year, Hyundai also plans to begin construction of its fifth plant in China in the mega-city of Chongqing.
  

With the two new plants beginning operations by 2018, Hyundai's total production capacity in China will rise to 1.65 million vehicles per year, up from 1.05 million vehicles at present. (Yonhap)