Toyota is to buy land in Sorocaba, in the Brazilian state of Sao Paulo, for a new plant for Toyota do Brasil, its long-established local sales and manufacturing company.

Toyota Brazil was one of the automaker's first foreign assemblers, commencing kit assembly of utilitarian Land Cruisers in 1958.

Toyota said it plans a new compact vehicle plant operating from 2011 "or after" on the 3.7m sq m plot.  Initially about 2,500 people would build up to 150,000 vehicles a year.

Brazil's trade and industry minister told Reuters the plant would cost between US$600m and $700m.

The automaker said the move was part of it "commitment to building an optimal worldwide production system based on [our] policy of making vehicles where they are sold.

Toyota Brazil employs around 3,000 currently.

Toyota's existing car plant in Indaiatuba makes the Corolla sedan, most with flexfuel engines to run on the local ethanol brew. It also makes components in Sao Bernardo do Campo (also home to a VW plant) near Sao Paulo.