The new facility will be built in Nanjing's Jiangning district with an investment of 500 million yuan ($78 million), reported The Beijing Times, citing Changan-Mazda president Yanagawa Masashi.

Changan-Mazda is a joint venture sales company between China's Changan Automobile Co. and Mazda.

It's the first step Mazda has taken to satisfy the Chinese government's requirement that foreign automakers expecting to establish production joint ventures in China must build an r&d center in the country, according to the newspaper.

The r&d center also will help Mazda to fulfill the government's informal requirement that joint ventures should introduce new brands.

Mazda and Ford Motor Co. both have applied to the Chinese government to restructure their three-way production joint venture, Changan Ford Mazda Automobile Co.

In approved, Changan would have two separate partnerships with Ford and Mazda. The Chinese government reportedly has agreed,

but the timeframe to complete the restructuring remains unknown.

Now that its r&d project is underway, Mazda also has begun preparations to launch a new car model for its planned production joint venture with Changan.

The partners will create a brand for its new model, according to the Beijing Times.

Mazda currently produces four models in China. The Mazda2 and Mazda3 are assembled at the Nanjing plant operated by Changan Ford Mazda.

The Mazda6 and Mazda8 are built by China FAW Group Corp. in the northeast China city of Changchun under a licensing agreement.

In the first eight months, Mazda sold 146,867 vehicles in China, on par with the sales achieved in the same period last year, according to J.D. Power.