Toyota said on Friday that it and China's Guangzhou Automobile Group Co. are considering jointly launching a firm to produce midsize passenger cars in Guangzhou, Dow Jones reported.

The new operation would help the leading Japanese car maker bring in more customers in the fast-growing market in southern China as Toyota's production operations are currently in China's northern regions.

Toyota declined to disclose details of the business, Dow Jones said, adding that the Nihon Keizai Shimbun newspaper reported that Toyota Motor plans to produce about 300,000 passenger car engines a year at a factory to be built by 2005 in an industrial area of Guangzhou with Guangzhou Automobile Group.

A Toyota spokesman, commenting on the report, told Dow Jones nothing concrete has been decided yet.

The news agency said Toyota is already in a partnership with FAW Group to jointly produce four Toyota models - including the Crown luxury sedan and the Land Cruiser sports utility vehicle but it doesn't jointly produce midsize passenger cars with FAW.