Toyota will invest about £50 million in its UK plant to increase production from the current 220,000 vehicles to 285,000 Corolla and Avensis models.

The expansion will also add around 500 new jobs to the current 4,850 headcount at Toyota Motor Manufacturing UK in Burnaston, near Derby.

In early May, Toyota Motor Manufacturing France (TMMF) increased its annual production capacity from 184,000 to 210,000 Yaris cars, adding 500 new employees. Depending on market demand, TMMF's output could be increased to a possible 240,000 units annually.

The increased production at TMMF and TMUK will lead to improvements in capacity utilisation, and is expected to benefit Toyota's profitability in Europe.

Last year, Toyota announced that TMUK would increase capacity to 270,000 units but, since then, responding to increasing demand, decided to accelerate and expanding its equipment investment programme.

This includes adding a second global (i.e. multiple model) body line, with conveyor-less transfer of vehicles bodies to increase flexibility, and installing the latest, highly efficient cartridge gun robots to replace existing automated spraying machines.

With the current annual capacity of 150,000 vehicles at its Turkish Adapazari plant (TMMT) and the planned capacity increase at TMMF and TMUK, Toyota will have a total European production capacity of 645,000 vehicles per year.

It will add another 100,000 when the joint Toyota/PSA Peugeot Citroën plant in the Czech Republic comes on line in 2005.

In 2004, Toyota expects to build 565,000 vehicles, 466,000 engines and 198,000 transmissions in Europe - the powertrains come from a plant in Poland.