Toyota Motor Co plans to spend JPY50bn yen (US$500m) to build an engine factory in northern Japan as it continues to boost output to meet growing demand for fuel-efficient cars.
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Toyota Motor Tohoku, a wholly owned unit of Japan’s largest automaker, said in a statement cited by Reuters that the factory in Miyagi Prefecture would start operations by the end of 2010 and eventually have capacity for 400,000 engines a year.
Toyota reportedly said the factory would produce a new type of compact four-cylinder petrol engine to supply the auto maker’s assembly plants in the region.
Company spokeswoman Kayo Doi declined to give Reuters further details such as the displacement or what models it would be used in.
Reuters, however, noted that the Nikkei business daily had reported last month that the new factory would make circa-1.5-litre engines for subcompact sedans and other small vehicles, demand for which has been increasing worldwide amid higher fuel prices.
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