UPDATE 1-Toyota to invest up to $1 bln to raise Japan output


(Adds details, background)

TOKYO, Oct 28 (Reuters) - Toyota Motor Corp. will invest up to 111 billion yen ($1 billion) to expand production of vehicles and parts in Japan to meet brisk sales growth worldwide, the world's second-biggest car maker said on Thursday.

Part of the investment will be spent on new assembly lines at two domestic vehicle plants, with operations due to start in late 2005, a spokesman said. As a result, output capacity will rise to 3.8 million units a year in Japan from 3.5 million units.

"To keep up with the strong sales growth in Japan and overseas, Toyota ... has decided to raise output capacity at these domestic sites," a spokesman said.

The expansion will result in about 3,300 new jobs combined, the spokesman said.

The fresh investment is not included in the 990 billion yen that Toyota previously said it would spend on total capital expenditures during the business year to next March.

Toyota, the world's most profitable auto maker, has been expanding sales globally and scrambling to add more capacity or build new plants in places such as China and the Czech Republic.

In calendar 2003, it overtook Ford Motor Co. to become the number two seller of cars in the world, with group-wide sales of 6.78 million vehicles, up 10 percent from 2002.

In the business year to next March, it is aiming to sell 7.2 million vehicles, marching towards its a goal of grabbing 15 percent of the global car market some time in the next decade.

Of the total outlays, about 18 billion yen will go to a new line at Toyota's Iwate plant in northern Japan, which will begin building small cars in October 2005. Output capacity will increase by 100,000 vehicles a year to 250,000 units.

A new 200,000-units-a-year line will also be added to Toyota's Miyata factory in southern Japan. Operations will begin in September 2005. Toyota declined to disclose the type of vehicle that will be built.

Elsewhere, it will build three new plants to produce new transmissions, engines and torque converters.

Toyota will invest between 25 billion to 30 billion yen on the new engine plant, which will have output capacity of 220,000 units a year and begin production in January 2006. ($1=106.63 Yen)



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