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Toyota eyes China engine plant
TOKYO, Japan -- Shares in Toyota Motor are higher Friday after a report the company will start building car engines in southern China for export to its Asian assembly plants. The report says Japan's No.1 carmaker will build 300,000 passenger car engines a year from 2005 in a joint venture with China's Guangzhou Automobile Group Co. Toyota already has a joint production venture with China's FAW Group. Other Japanese makers, along with competitors from Europe and the United States, likewise already build engines and cars in China for the domestic market. Soaring domestic demand is expected to push China's automobile production from 3.1 million units last year to 6.1 million in 2005. According to the Nihon Keizai business daily, Toyota will team up with Guangzhou Automobile to build a 30 billion yen ($273 million) engine plant in an industrial area of the city of Guangzhou in Guangdong province. It says that after getting approval from the Chinese government, Toyota will take a 70 percent stake in the venture, with Guangzhou Automobile holding the other 30 percent. Toyota said Friday it was talking to Guangzhou Automobile but that nothing had been decided yet, news agencies report. Toyota shares are 2.38 percent higher to 3440 yen at the end of the morning session Friday. The broader market, measured by the Nikkei 225, is up 2.54 percent. The Nihon Keizai report says the factory will build 2- to 2.4-liter engines for the Camry midsize sedan. The engines are expected to be shipped to Taiwan and Thailand, and could be shipped to Japan as well. Toyota and Guangzhou Automobile also are seeking Chinese government approval to begin producing 30,000 Camry passenger cars a year for the local market from 2006.
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