CHICAGO – Toyota will expand its Princeton, IN, factory to produce another 50,000 Highlander cross/utility vehicles, including hybrid versions, Toyota Motor North America President Yoshi Inaba says during an Economic Club of Chicago speech here during the auto show.

The additional capacity is expected to be available in late 2013, and at that point Toyota will stop assembling the Highlander in Japan.

Princeton has built non-hybrid Highlander CUVs since 2009. It also makes Sienna minivans and Sequoia SUVs.

Hybrid versions of the Highlander have been sourced for the U.S. from Kyushu, Japan, but a Toyota executive told WardsAuto nearly four years ago of plans to localize hybrid production here.

Inaba says the $400 million investment in Princeton will create an additional 400 jobs directly, plus many more at suppliers located nearby. The plant is 280 miles (451 km) south of Chicago and employs 4,800 people.

It’s unclear whether the Princeton expansion corresponds with the rollout of an all-new Highlander. The current version launched in 2007.

Toyota builds the Highlander in China for the domestic market only. The CUV also is sold in Russia and Australia, and Princeton will export to those countries, the auto maker says.

In 2011, Toyota sold 95,906 Highlanders built at Princeton, up 35.5% from the prior year, plus 5,346 units imported from Japan, WardsAuto data shows. In 2010, the auto maker imported 21,354 Highlanders from Japan.

U.S. sales of the Highlander Hybrid last year totaled 4,549 units, down 38.7% from 2010. The CUV was No.3 in the light-truck hybrid sector behind the Ford Escape and best-selling Lexus RX 450h. The Highlander is one of nine hybrids offered by the Toyota and Lexus brands.

In 2011, the Highlander placed 10th in WardsAuto’s crowded Middle CUV segment, behind the best-selling Escape and Chevrolet Equinox.

Inaba says the expansion reflects growing optimism for the auto industry in the U.S., which is responsible for 8 million American jobs and is expected to create 150,000 new jobs over the next four years, based on Center for Automotive Research forecasts.

“So we make a tremendous positive impact on this country, and collectively the industry will help lead America to better days ahead,” he says.

with Christie Schweinsberg