Toyota To Build New Plant For Next Generation Highlander CUV in Mississippi

TOKYO, Feb 27, 2007; Reuters reported that Toyota Motor Corp. said on Tuesday it will build a new plant in the United States, the latest sign of its pressing need for capacity to keep up with booming demand, with media reports placing the factory in the southern state of Mississippi.

Japanese business daily Nikkei reported earlier that the plant, to cost around 100 billion yen ($830 million), would have capacity to build 150,000 units a year and would produce the Highlander sport utility vehicle starting in 2009.

A separate report from Kyodo news agency put the investment figure at 200 billion yen and output capacity at 200,000 units a year. The plant will create about 2,000 new jobs, Kyodo also said, citing sources familiar with the matter.

Toyota, which may claim the title of the world's biggest auto maker from General Motors Corp. (GM.N: Quote, Profile , Research) this year, had said it was reviewing possible locations for an eighth vehicle assembly plant in North America in an attempt to boost local production and stem a rise in imports.

Toyota said later it would issue a news release and hold a briefing at 1500 GMT regarding a new factory in the United States, but declined to provide further details.

With a 13 percent jump in 2006 sales, Toyota sped past Chrysler as the third-biggest car maker in the United States, putting its market share at a record high 15.4 percent against the U.S. brand's 12.9 percent. This year, Toyota is widely expected to edge past Ford Motor Co. (F.N: Quote, Profile , Research), having trailed the U.S. icon by just one percentage point last year.

Ahead of the reported Mississippi plan, Toyota will add a combined 250,000 units in annual capacity in North America by using a line at affiliate Fuji Heavy Industries' (7270.T: Quote, NEWS , Research) Indiana factory this year and opening a new Canadian plant next year. Late last year, Toyota began production of the Tundra pickup truck at a new 200,000-units-a-year factory in Texas.

Toyota is under pressure to boost production in the region to avoid potential political fallout from a jump in the number of vehicles shipped from Japan to the United States. Last year, just half of the vehicles it sold in the United States were built in North America, compared with a rate of more than 70 percent for both Honda Motor Co. (7267.T: Quote, NEWS , Research) and Nissan Motor Co. (7201.T: Quote, NEWS , Research).

At the current rate of sales growth in North America, some analysts say Toyota would need to add capacity at a rate of one factory every year.

Other states in the running for Toyota's new plant had included Tennessee and Arkansas, the Nikkei said. The Wall Street Journal reported last month that three to five locations in the South were under study, including two sites in Tennessee, and others in Arkansas and North Carolina.

Mississippi is also home to a Nissan vehicle plant.