Toyota has decided to move forward its target year of producing 300,000 cars annually in China to 2007 from 2010, the daily Asahi Shimbun reported on its website on Thursday, according to Dow Jones Newswires.

Toyota's decision came in response to other foreign car makers' recent decisions to step up their production in the fast growing Chinese market, the daily reportedly added.

Dow Jones noted that Toyota was a latecomer to the Chinese market and began production there only last year, launching a subcompact car with an annual sales target of 30,000 units.

In order to catch up with the rivals, Toyota has been seeking to enhance its business alliance with Chinese car makers, Dow Jones said.

According to the report, a Japanese survey shows that China's new car sales increased to 2.02 million for the first half of this year, up 32% from the same period last year.

The country is expected to become the world's fourth largest car market as early as this year following the US, Japan and Germany, Dow Jones said.