FRANKFURT -- Toyota Motor Corp. said early on Tuesday it planned to raise production capacity at its plants in the UK and in France to underpin its further growth in Europe.
In a move underlining the growing strength of Japanese carmakers in a declining European market, Toyota said it would introduce a third shift at its UK Burnaston plant and at Valenciennes in France from the second quarter of next year.
As a result, annual production capacity in the UK, where the company has 4,600 employees, will rise over 20 percent to about 270,000 vehicles, creating about 1,000 jobs, the company said in a statement.
In the UK, Toyota makes the medium-sized Corolla and the Avensis, which the carmaker plans will be the first model made in Europe that it will export to Japan.
In France, where Toyota builds its small Yaris model and employs more than 2,600 people, the company will initially create up to 500 new jobs to raise annual capacity to 210,000 vehicles from 184,000. It will ultimately rise to 240,000.
It is the first time that Toyota will run a three-shift system in a vehicle plant, and the move comes against a backdrop of industry-wide over-capacity of around 30 percent in Europe.
Fresh models designed for European tastes and improved dealer networks have helped boost Japanese and Korean car sales in Europe in the last year or so.
By contrast, all European carmakers saw their sales fall in April and they are in turn being hurt by the strength of the euro.
Mass-market rivals such as Fiat, General Motors and Ford have recently cut output.
Toyota repeated that it expected to sell 800,000 vehicles earlier than 2005, its original target.
"The increased production...will lead to improvements in capacity utilization and is expected to benefit Toyota's profitability in Europe," said the company, which also noted that the decision coincided with its philosophy of building cars where they are sold.
Toyota, which also makes about 100,000 cars at its Adapazari plant in Turkey, is building a new plant with France's PSA Peugeot-Citroen in the Czech Republic. That will make 300,000 entry-level small cars from 2005, of which 100,000 will be for the Toyota brand. Japanese carmakers, whose revenues and profits have been helped recently by exchange rates which make European imports cheaper, have seen their share of the European market rise in the last year.
Toyota, which still imports about half its European-sold cars from Japan, is the biggest Japanese player in the region. In April it had a 4.6 percent market share in western Europe.