The Toyota Motor group will expand parts procurement in northeastern Japan as it turns the Tohoku region into a production base for small cars, executive vice president Atsushi Niimi has said.

According to the Nikkei, he spoke at a ceremony marking the start of operations at subsidiary Toyota Motor East Japan's factory in Miyagi Prefecture, the group's first engine plant in the area.

Toyota sees the Tohoku region as its third domestic manufacturing base after the greater Nagoya area and Kyushu. Toyota Motor East Japan will handle everything from development, parts production and assembly of finished vehicles.

The launch of engine production is "a big step forward," he said.

The new factory will initially produce engines for the Aqua [Prius c] hybrid subcompact. Engines from the plant may be installed in other models as Toyota expands its lineup of small hybrids.

The facility features a highly efficient production line that the firm says will allow it to turn a profit even when manufacturing small batches. The line takes up about half the space of conventional machinery and can be adjusted quickly to manufacture other products, enabling Toyota to meet changes in demand, according to the automaker.