Toyota to build new SUV plant in Mississippi

Toyota Motor Corp., the world's second-largest automaker, plans to put up a sport utility vehicle plant in Mississippi. The amount to be spent on the plant is around 100 billion yen ($830 million), a newspaper reported on Tuesday. This marks Toyota’s latest step towards its endeavor to keep up with the rising demand in the U.S.

Sales in the U.S. grew 13 percent to 2.54 million last year, more rapidly than Toyota's capability in the region, which made the company executives worry about U.S. political criticism over the number of vehicles shipped from Japan to the United States.

According to some people familiar with the plan, each year, the plant will build about 150,000 vehicles, most likely the Highlander, a crossover vehicle whose sister car is the Lexus RX 350. The factory will be on line in 2009.

In order to boost local production, Toyota had been assessing probable locations for an eighth vehicle assembly plant in North America, the company said. Toyota trails only behind General Motors Corp. in global sales and may improve this year to claim the title of the world's biggest auto maker.

“Toyota clearly needs more capacity in North America with its level of sales growth,” said an analyst.

In 2006, Toyota ousted DaimlerChrysler of its position of the third-biggest automaker in the United States. This year, it could further advance up to become the second biggest in American sales by budging Ford Motor.

According to some analysts, with the current rate of sales growth in North America, Toyota would need to boost production capacity at a rate of one factory every year.

Toyota will issue a press release about a new production plant at midnight Tokyo time, or 10 a.m. New York time, it said in an e-mailed statement. No other details were given.

Mississippi Governor Haley Barbour will announce a “major economic development” today, said his spokesman Pete Smith, in an interview. However, he declined to confirm if the planned announcement was related to Toyota.

Toyota's North American manufacturing unit spokesman, Dan Sieger refused to comment on the Nikkei report which said that Toyota will open a factory in Mississippi.

Toyota shares went up 0.6 percent to 8,340 yen in Tokyo, after the report. The shares have gained one-third in value in the past 12 months.