PHOENIX – Toyota Motor Corp. confirms it will build the Camry hybrid in the U.S. beginning late next year, marking the first time it will produce a hybrid electric vehicle (HEV) in North America, officials at a Toyota active safety seminar here say.

The announcement from Toyota Motor Mfg. North America caps months of speculation and hints from Toyota that it would, for a variety of business factors, begin to source some HEV production in North America.

Hybrid version of Camry to be built in U.S.

Currently, all Toyota/Lexus HEVs are assembled in Japan.

Introduction of the next-generation Camry was slightly accelerated for a launch next spring. The Camry hybrid, says Toyota in a release, will follow “in late 2006.”

Both the standard Camry and the HEV variant will be built at Toyota Motor Mfg. Kentucky Inc. (TMMK) in Georgetown, KY, where Toyota has invested $10 million to include Camry hybrid production. (See related story: New Camry Coming Sooner Than Planned)

Toyota says the HEV variant of the next-generation Camry will roll down the same assembly line as the conventionally powered models. The company says TMMK, which currently builds the Camry, Avalon and Solara, has capacity for 48,000 Camry HEVs annually.

Most of Toyota's HEVs have been in chronic short supply in the U.S., particularly the popularly priced Prius, and similar demand is expected for the HEV version of the Highlander Hybrid cross/utility vehicle, which goes on sale next month.

The auto maker's Lexus upscale division also has reported strong demand for the hybrid-powered RX 400h luxury CUV. Toyota has said it is anxious to reduce the time consumers must wait to buy its HEVs.

“Hybrid production in the U.S. will allow us to be even more responsive to the desires of our customers,” says Jim Press, Toyota Motor Sales U.S.A. executive vice president and chief operating officer.