Toyota will soon announce an alliance with First Automobile Works (FAW) Group to build luxury cars for sale in China, a Japanese newspaper said.

According to the Nihon Keizai Shimbun, Toyota and FAW will establish a car plant in Tianjin by 2005.

The newspaper said that the plant would probably make a combination of Toyota models and the luxury Hong Qi vehicles made by FAW.

But Toyota would say only that nothing had been decided, the Nihon Keizai Shimbun said.

The newspaper said the two firms are targeting the top end of the market where profits are larger than the low-price, volume sector.

Toyota’s Land Cruiser SUV has already proved a hit with newly well-heeled Chinese, the Nihon Keizai Shimbun said.

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The newspaper added that Toyota and FAW have already begun to select the vehicle platforms they will use.

The annual production target has bee set initially at 50,000 to 60,000 units but is expected to reach 200,000, the Nihon Keizai Shimbun said.