Toyota and Guangzhou Auto Group Corp. have held a ground-breaking ceremony in China at the site of a new joint venture factory to produce car engines, news agency reports said.

Toyota owns the joint venture 70% with the remaining 30% held by Guangzhou Auto and the JV is capitalised at 1.1 billion yuan. Total investment in the project is reportedly CNY2.2 billion.

Based in Guangzhou, the joint venture is scheduled to start building 25,000 2.4-litre engines for export to Japan in 2005 and will ultimately have an annual capacity of 300,000 units.

TMC senior managing director Akio Toyoda is scheduled to become chairman of the new company, and the company’s China division project general manager, Keisaku Inoshita, will be president.