According to the report the plant will be built near the city of Sorocaba, with construction expected to be completed by 2010.
The plant is expected to produce 200,000 vehicles per year, primarily small cars. In addition, the complex will also include an engine plant.
Toyota currently has two other plants in Sao Paulo state. The automaker manufactures the Corolla and Fielder models at its plant in Indaiatuba, and has a parts plant in Sao Bernardo do Campo.
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