A joint venture between Toyota Motor Corp. and its Chinese ally kicked off construction of an automobile plant Wednesday in Tianjin, northeastern China.
The start of construction follows the Chinese government's approval in June of a plan for Tianjin Toyota Motor Co. to build 1.3-liter cars with the Toyota badge from 2002.
The plan to set up the 50-50 venture with China's Tianjin Automobile Xiali Corp. received endorsement in mid-June from the Foreign Trade and Economic Cooperation Ministry.
Toyota will become the sixth foreign automaker to have a production base in China, after such rivals as Volkswagen AG of Germany and General Motors Corp. of the United States.
The project will boost competition with those rivals, motor industry analysts said.
Other automakers intent on cashing in on the potentially vast Chinese market include Honda Motor Co., Suzuki Motor Corp. and Daihatsu Motor Co., of which Toyota Motor acquired a 51.2 percent equity stake in 1998.
Toyota's new venture envisions manufacturing 30,000 models a year of a small car resembling the popular Vitz, which is known in some other markets as the Yaris.
While its Chinese name has not been announced, the car will come equipped with the same engine and suspension as the Vitz, Toyota officials said.
The planned design of the Chinese version of the Vitz also remains unknown.
Tianjin Automobile has long been manufacturing Charade models on the strength of a 1987 technological transfer from Daihatsu Motor.
Since Daihatsu is now under the Toyota umbrella, Tianjin Automobile will in 2001 start churning out a new small car also modeled after the Vitz, prior to the start of production at the new Toyota-Tianjin Automobile venture.