Toyota Motor Corp., the world's largest automaker, said it will go ahead with plans to build a new auto-assembly plant in Brazil, where the government extended a tax cut to spur vehicle sales.
The company will start construction of the factory in Sorocaba in southeastern Brazil in this year's second half and expects it to be ready in 2011, Erick Boccia, a Toyota spokesman in Sao Paulo, said in a telephone interview.
"The tax cut in Brazil is important and favored the decision to maintain our plans," Boccia said.
Toyota is proceeding with the factory after saying Dec. 14 that it was reviewing investment plans in China, Brazil and India as sales declined. The Brazilian government has reduced sales taxes on cars since then in a bid to revive demand and help a sector that generates 23 percent of the country's industrial output. The tax cut was extended today.
The Toyota City, Japan-based company initially announced the Sorocaba plant in July 2008, with an annual capacity of 150,000 vehicles. That will more than triple Toyota's current capacity in the country, Boccia said.
The factory will make compact cars, he said. Boccia declined to say how much Toyota is investing.
The automaker now has a plant in Indaiatuba, also in southeastern Brazil, that is able to build about 70,000 Corolla cars a year. Toyota's sales of cars in Brazil rose 29 percent in the first five months of the year to 19,648, according to the nation's automakers association.
