The new venture has a projected production capacity of 250,000 cars a year, the companies said in a statement released late Monday.

The investment is the latest by the U.S. automaker in the ex-Soviet republic, whose relations with the United States plummeted following the 2005 uprising in Andijan.

Human rights groups and witnesses say hundreds of civilians were killed by government troops during mass protests in the eastern Uzbek town. Western governments harshly criticized the action and called for an independent investigation.

Uzbekistan in turn kicked U.S. troops out of a base being used in support of military operations in neighbouring Afghanistan.

The joint venture, GM Uzbekistan, will be set up at a plant in the town of Asaka in the Andijan region, where Uzavtosanoat currently runs a factory that was originally a joint venture with South Korea's Daewoo Group.

The plant currently assembles cars based on kits supplied by GM Daewoo Auto & Technology Co., the South Korean unit of General Motors Corp.

``GM will own 25 per cent plus one share in this joint venture with the option to increase its stake to 40 per cent' ' GM Europe President Carl-Peter Forster said.

The joint venture will initially assemble three Chevrolet models _ the Captiva, Epica and Tacuma _ with full-scale production slated to begin in the next three years.

Hyundai Motor Co. had also sought to buy up Uzbekistan-Daewoo venture, but talks collapsed last year over differences on the purchase price.