Toyota Motor Corp. is investing 2 billion yen ($25.3 million) for a new engine plant that will supply a new compact hybrid car to be made in Japan. The plant will be built in Miyagi prefecture and will produce engines for the hybrid, which is scheduled to go on sale in Japan by the end of next year.
The vehicle will be manufactured in the neighboring Iwate prefecture. This endeavor is part of the company’s efforts to consolidate its far-flung body-assembling units.
This move aims to turn northern Japan into a hub for small-vehicle manufacturing for Toyota by combining the operations of three local units by July 2012.
The plan will combine the wholly-owned body-maker Central Motor Co. with components maker Toyota Motor Tohoku Corp. into Kanto Auto Works Ltd., which is a partially owned subsidiary that will be overtaken fully by Toyota Motor Corp. in January. Toyota announced the buyout last week.
The engine factory, which was announced July 19, will be erected at the current location of Toyota Motor Tohoku’s components plant, and will open with a capacity of 100,000 engines annually, Toyota revealed.
The company initially disclosed plans for the plant in 2008. However, the plan was placed on hold during the worldwide financial crisis. The latest announcement revives the expansion.
The plant will supply engines for hybrids slated for production on lines 1 and 2 at Kanto Auto Work’s plant in Iwate. It will have around 100 employees, but it was not still made clear whether these staff members will be new hires or transferees from other facilities.