South Korea's largest carmaker Hyundai Motor said Wednesday it will sign a preliminary agreement to build a fourth plant in China, as it looks to expand in the world's biggest car market.

Chairman Chung Mong-Koo will put his name to the deal on Thursday, it said in a statement.

With an annual production capacity of 300,000 cars, the plant in the southwestern mega-city of Chongqing is scheduled for completion in 2016 and will mark a "new leap forward" in the country, Hyundai added.

The firm already has three car plants on the outskirts of Beijing that currently produce a combined 1.05 million units per year, as well as a commercial vehicle plant in Sichuan Province with an annual capacity of 160,000.

Hyundai's sister company Kia Motors has three plants in Jiangsu Province that can produce a total of 740,000 units a year.

"The construction of new plants is essential for Hyundai-Kia Motor Group to keep up with its current market share of near 10 percent in China," the statement said.

Chongqing has a population of 30 million and its economic output surged 12.3 percent in 2013.