Ford has received Chinese government approval for its new assembly plant in China.

The plant in Nanjing, will be run by Ford's joint venture with Chongqing Automobile and is part of a $1 billion (£530 million) expansion plan.

Mazda will participate in the project through an unspecified equity stake in Changan, Ford said in a statement today.

The plant will have an initial output capacity of 160,000 units a year, but could be expanded to produce 200,000 units.

Ford, whose first Chinese car factory opened only in 2003, has said it aimed to more than triple output in China to 65,000 units in 2004 as it raced to catch up with market leaders General Motors and Volkswagen.