Toyota's Thai unit expects local car sales to rise 38.5% to 1.1m in 2012, up from a drop of 0.8% last year when the sector was hit by flood-related supply disruption.
The carmaker planned to spend about THB8.2bn (US$257m) to open two new plants in Thailand where demand is expected to be strong due to the government's stimulus measures, Toyota Motor Thai unit said in a statement cited by Reuters.
Toyota expects its own sales to rise 55.1% this year compared with a drop of 11% last year, it said.
The 11 March earthquake and tsunami in Japan and Thai floods late in the year hit Toyota's supply chain leading to a plunge in production, sales and inventory in many markets.
Analysts told Reuters Thailand's automobile market is expected to recover strongly in 2012, helped by tax rebates for first-time car buyers and pent-up demand as the industry recovers from the floods.