Toyota's planned £50 million investment in its UK manufacturing operations will boost the carmaker's UK production from 220,000 cars a year to 285,000, and provide another 500 jobs at its Burnaston plant in the Midlands. The investment is part of Toyota's plan to increase its overall European production by 50% to 750,000 cars per year.

As well as the planned increases in the UK, Toyota will boost output at plants in France and Turkey, as well as in the Czech Republic where the company will operate a joint venture with French manufacturer PSA Peugeot-Citroen.

Toyota has found the right recipe for success in the European market and is now having to increase production to keep pace with a demand that is exceeding its own forecasts.

After selling 800,000 cars in Europe last year, Toyota now aims to sell 860,000 units in 2004. This forecast may be revised upwards in the summer, Toyota has indicated.

Toyota has developed its product offering to the European market in recent years, enhancing its models' styling to European tastes and also developing an improved range of the diesel engine models that this diesel-loving market wants. This has allowed the Japanese manufacturer to achieve growth in Europe's flat new car market, at the expense of some of its competitors.

Toyota's decision to up its UK production brings a welcome boost to the country's motor industry, which recently heard vague threats from its biggest manufacturer, Nissan, that it may shift some of its production to the Continent unless the UK adopts the euro.

However, with 80% of Burnaston's output of Avensis and Corolla models exported, mostly to the Continent, the weakening of the pound against the euro has favoured the UK and is thought to have influenced Toyota's decision. With its market share exceeding 5% for the first time, Toyota is set for further growth in Europe and its UK output may rise further in the future as a result.