Beijing Hyundai Motor Co Ltd started the construction of a new factory in Cangzhou, Hebei province, on Friday.
This is Hyundai's first and only factory outside Beijing, with a total investment of 12 billion yuan ($1.92 billion). Construction is expected to be finished by the end of 2016.
An economy vehicle model and an updated SUV model will be produced in the new factory.
They are two best-selling models in markets neighboring Cangzhou. About 300,000 vehicles and 200,000 engines are expected to be produced annually.