As part of its joint venture with Chinese motor company Dongfeng Motor Group, Japanese auto giant Honda has announced that it is investing around 3 billion yuan or $436 million to build a new manufacturing facility in China. Honda confirmed the news through a statement posted on the company's official website.

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It was reported in October that Honda is working on a deal to build a new factory in China by 2019. The said factory will have an annual production capacity of 120,000 cars.

The new facility will be situated on a 1.2-million square-meter plot of land located about eight kilometers southeast of the first plant in the Wuhan Economic and Technological Development District. This third facility will be designed so that it can support the production of electric vehicles, a new segment of the market which Honda expects to expand in China in the next couple of year.

Despite the slow economic decline in China in the past several quarters, Honda has enjoyed massive growth in the country in the last two years. Honda said that the growing demands for sports utility vehicle have helped the company established its brand in China. According to Reuters, Honda said that its year-on-year growth has increased by 28.3 percent in the first 11 months of this year.

The partnership with Dongfeng is just one of Honda's two joint ventures in China, and it is already nearing its maximum capacity. With the third facility approved, Honda is expected to push its overall production capacity to 1.25 million units once it is finished.

In a statement acquired by Benzinga, Honda Motor president and chief executive officer Takahiro Hachigo said, "The Chinese market has potential for further development and growth. In order to continue meeting such strong demand, Honda will introduce its highly attractive products equipped with leading-edge technologies to the Chinese market ahead of other markets around the world and deliver joys to our customers here in China."