Toyota on Friday confirmed it was building a US$192m plant in Japan to produce batteries for petrol-electric hybrids.

Toyota spokesman Paul Nolasco told the Associated Press (AP) that the automaker's joint venture with Matsushita Electric Industrial (maker of Panasonic products), is building the plant in Shizuoka prefecture, in central Japan, though he declined to divulge more details.

The plant will produce nickel-metal hydride batteries, now in the company's hit Prius hybrid, AP said.

According to the news agency, Japan's top business daily newspaper, the Nikkei, reported earlier on Friday that Toyota was building another plant in Japan to make lithium-ion batteries, set to be running by 2010, for future ecological cars, but Nolasco told AP no decision had been made on such a plant.

AP noted that Prius-maker Toyota has said it would boost hybrid sales to 1m a year sometime after 2010.

It recently celebrated sales of a million Prius units globally.

The current Prius uses nickel metal hydride batteries but Toyota has said lithium-ion batteries, which are smaller, and can be recharged from a home electrical outlet, may be used in its plug-in models.

The Associated Press noted that, earlier this week, Honda said it would boost hybrid sales to 500,000 a year by sometime after 2010 and would launch a fourth hybrid model next year.

Nissan Motor still hasn't developed its own hybrid system for commercial sale (though it does use bought-in Toyota technology for the California-emissions-states-only hybrid Altima sold in the US), but has said it will have an 'original' hybrid by 2010, the report added.

Nissan is focusing more on electric vehicles, promising them for the US and Japanese markets by 2010.

Also this week, Nissan said its joint venture with NEC would start mass-producing lithium-ion batteries in 2009 at a plant in Japan.