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Ford Motor Co said its newest joint-venture factory in China began operations Monday and will produce small cars under the Ford and Mazda brands for the fast-growing Chinese market.

The US$510 million factory in the eastern city of Nanjing will have an initial production capacity of 160,000 vehicles per year, Ford said. It said that would increase Ford's annual production capacity in China to 410,000 vehicles.

China is the world's second-biggest and fastest-growing vehicle market. Global automakers have invested billions of dollars in hopes of capturing a share of the surging growth.

"This new state-of-the-art facility will significantly increase our capacity in China, and allow us to continue our rapid growth in the market," Ford President and CEO Alan Mulally said in a statement.

The unusually flexible new factory can produce eight models on different chassis, the company said. Ford, based in Dearborn, Michigan, says its sales in China rose 29 percent in the first eight months of this year to 114,702 vehicles.

Ford manufactures cars in Nanjing with its Japanese affiliate, Mazda Motor Corp. and their Chinese partner, Changan Automotive Group.

Ford also sells imported models from its Jaguar, Land Rover, Lincoln and Volvo brands.