Toyota plans to build a factory in Europe to produce diesel engines for Yaris (Vitz) compact cars that are due to start rolling off the line at its Valenciennes plant in northern France early next year, AutoAsia Online says.

The facility will be located either next-door to Toyota's petrol engine plant in Walbrzych, 500km south-west of Warsaw (which will start production of manual transmissions in 2002) or close to Valenciennes.

Wherever the factory ends up, Toyota wants to start production of diesel motors in Europe by the summer of 2003 as it moves to lift its regional market share from 3.5% to 5% by 2005.