Toyota Motor plans to build a second vehicle assembly plant in Malaysia to tap into growing regional demand, according to reports in Japan quoting company sources.

Toyota currently has a vehicle production facility in Malaysia under its UMW Toyota Motor joint venture, which sold close to 96,000 Toyota and Lexus vehicles last year. The company assembles the Hilux pickup truck and the passenger vehicles such as the Vios, Corolla, Fortuner and Innova in the country.

Furthermore, Toyota’s affiliate Daihatsu Motor is a joint venture partner in the country’s largest automaker Perodua.

The new plant is aimed at fulfilling projected medium-term demand in the region. It will have an initial capacity of 50,000 units, rising to 100,000 units when required.

UMW Toyota expects to invest JPY30bn (US$275m) in the new facility, which is scheduled to become operational in early 2018.

Toyota resumed new overseas plant construction last year after a two-year freeze aimed at improving quality and efficiency at existing plants. It expanded capacity at an existing plant in Argentina last year and plans to have two additional plants operating in China and Mexico in 2017 and 2019 respectively.

Additional capacity is also being considered for the Philippines – one of the fastest growing markets in the Asia-Pacific region in the last few years.