Toyota Motor reportedly said on Tuesday that it was considering increasing its domestic production capacity to meet growing overseas demand.

According to Reuters, the Nihon Keizai newspaper reported earlier that the automaker would invest $US457.6 million by 2006 to raise its output capacity in Japan by 10% to 3.8 million vehicles a year.

“We are considering (a domestic production capacity increase), but nothing has been decided yet,” Toyota spokesman Shinya Matsumoto told the news agency.

The paper reportedly said investment would be used to build production lines at Toyota’s plants in Kyushu in southern Japan and in Tohoku in northern Japan to meet growing sales in Europe, the United States and Asia.

This would be the first such spending on Toyota’s domestic plants since 1993, the paper added.

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Reuters noted that, given faster-than-expected sales growth, Toyota this month raised its global sales forecast for the year to next March by 2.6% to 7.2 million vehicles for the group, which includes minicar unit Daihatsu and truckmaker Hino.

Toyota’s sales in the United States have risen year-on-year in each of the last 14 months, and it shipped more than 1 million vehicles in the first half, the report added.

The popularity of the hybrid Prius has contributed to the company’s US sales growth, Reuters said, adding that production has failed to keep up with demand, and some customers have had to wait several months before getting a vehicle.