Toyota Motor Corp is planning to invest 3.6 billion yuan (US$507 million) to expand capacity in China, the world's second-largest auto market.

FAW Toyota's factory in Changchun, northern China, will be able to produce 200,000 units by 2013, compared with 10,000 units now, according to an industrial planning blueprint posted on the local government's Website.

Construction will begin in May and may be completed by the year's end, it said.

Industry sources said the enlarged capacity will enable Toyota to introduce more-competitive models such as the Auris compact and Wish wagon.

Li Xiang, spokesman of FAW Toyota, yesterday confirmed the move.

"Production expansion is important for Toyota's development in China, which will accord with the market demand," said Li, adding that it is just a preliminary plan as yet.

FAW Toyota raised its sales target to 400,000 units this year, nearly approaching the full capacity of 420,000 units among three existing plants. Last year, the car maker sold over 280,000 units in China including Reiz, Corolla, Vios and Crown sedans.

"The added investment reflects Toyota's long-term strategy in China amid a prosperous outlook," said analyst Jerry Huang from automotive consultancy CSM Asia Corp Shanghai Office.

"The car maker is also preparing to strengthen its position in the mainstream passenger car segment, particularly in multi-purpose vehicles, which have a strong demand," he added.

The plant in Changchun is equally owned by Toyota and its Chinese partner First Automotive Works Group, making the Land Cruiser sport-utility vehicle and eco-friendly Prius sedans.

Toyota, which is vying with General Motors Corp to become the world's largest car maker, aims to boost its market share from five percent in China to 10 percent by 2010.

Last year, sales of Toyota climbed 62 percent to 499,000 units in China, while GM sold one million cars.

(Shanghai Daily March 9, 2008)