China FAW Group Corp., the country's third-largest automaker by sales, said Monday that it will build a new assembly plant with a designed annual production capacity of 400,000 units in the northern port city of Tianjin.

FAW Group said in a statement that its subsidiary, Tianjin FAW Xiali Automobile Co., has signed the agreement on the new plant with the government of Tianjin's Airport Economic Zone.

Construction on the plant is scheduled to kick off in the second half of the year, it said.

The first phase of the project, which will cost 5 billion yuan (793 million U.S. dollars), will churn out 200,000 passenger cars and 200,000 sets of car powertrains after its completion in two years, it said.

The second phase has the same designed production capacity as the first phase, it said, giving no timetable for its construction.

FAW Group currently has an annual production capacity of 750,000 units in Tianjin. The new plant, along with production expansion at Tianjin FAW Xiali, is expected to help double FAW Group's annual capacity in Tianjin by 2015, according to the statement.

FAW Group sold 2.6 million vehicles last year, making it China's third-largest automaker after SAIC Motor Corp. and Dongfeng Motor Corp.

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