The third-biggest US car retailer, UnitedAuto Group, has formed a joint venture to become one of Toyota's first dealers in Mexico, according to a report in the Detroit News.

UAG Holdings de Mexico and car dealers Mario and Javier Padilla Longoria will operate a Toyota dealership in Monterrey, Mexico, the newspaper said.

The dealership, Toyota de Monterrey, will be among six the Japanese car maker plans as it begins sales in Mexico, the Detroit News said.

The venture will be UnitedAuto's first Mexico dealership, spokesman Phil Hartz told the newspaper.

The Detroit-based company has 123 US dealerships and 55 international franchises, mainly in the UK, the Detroit News said.

Toyota set up Toyota Motor Sales de Mexico in May 2001 in expectation of Mexico ending its remaining import tariffs on cars and trucks in January 2004 under the North American Free Trade Agreement, the newspaper added.