Toyota unveils $700 mn R&D unit in China

TOKYO: Toyota on Wednesday said it would invest nearly $700 mn to set up its first fully-fledged research and development base in China in response to demand in the country's booming auto market.

Toyota Motor Engineering & Manufacturing (China) Co. Ltd. will build the plant at an economic development zone in Changshu, near Shanghai, with plans to begin operations in the spring of 2011.

"It will be Toyota's first full-fledged research and development company in China," a spokeswoman for the Japanese auto giant said in Tokyo.

Toyota, which fully owns the company, plans to invest a total of 689 million dollars to purchase land, build research facilities and a test track, the spokeswoman said.

The new company will survey the Chinese auto market, study quality control at its local assembly plants and develop low-emission vehicles and engines for the local market.

China overtook the United States last year to become the world's largest auto market in terms of units sold.

Auto sales hit 13.64 million units in 2009, up 46 percent on-year, and are expected to rise by a further 25 percent this year to 17 million.

The company plans to raise the number of employees from an initial 200 to 1,000 in the future.

"TMEC ... aims to tailor vehicles to the demands of Chinese consumers," Toyota said in a statement.

"Its establishment enhances Toyota Motor Corp.'s ability to conduct market-environment research and R & D in China."

The world's biggest automaker will coordinate the unit's activities with those of its existing research and development centres run by its Chinese joint ventures, it said.