BEIJING - Ford Motor Co. expects to buy more than US$2.6 billion worth of auto parts in China for overseas use this year and build a new factory with Japanese affiliate Mazda Motor Corp. and local partner Changan Automotive Group.

Ford's chairman, William Clay Ford, disclosed the plan for boosting China sources during a visit to Beijing on Thursday, said company spokesman Kenneth Hsu.

That amount would be 63 percent higher than the US$1.6 billion (euro1.3 billion) Ford spent on China-made auto parts in 2005, Hsu said.

The new auto plant, to be launched in 2007, will be located in eastern China's Nanjing and will produce up to 160,000 vehicles a year. Coupled with an expansion at a factory in the southwestern city of Chongqing, it will boost total capacity to more than 400,000 units a year, the company said in a statement.

Meanwhile, Changan Ford Mazda Engine Co., an engine joint venture between the three parties, will also launch a plant in Nanjing in the first half of next year with annual capacity of 350,000 engines, the statement said.

Ford, which posted a preliminary third-quarter loss of US$5.8 billion (euro4.6 billion) in its worldwide business, has seen strong sales growth in booming China. Its vehicle sales in China more than doubled to 114,685 units in the first three quarters of this year from 55,807 in the same period last year.