WOODSTOCK, Ontario -- Toyota Motor Corp. has chosen Canada for its seventh North American car assembly plant, the company confirmed on Thursday, adding capacity to meet burgeoning demand.
Japan's top automaker said it would invest about $650 million (Canadian $800 million) in building the Woodstock, Ontario, factory, which will have annual production capacity of 100,000 vehicles.
The plant will begin production in 2008. It will build RAV4 SUVs.
The world's most profitable carmaker and the second-biggest by sales volume said the plant would create at least 1,300 new jobs.
Toyota's expansion comes at a time when General Motors and Ford Motor Co. are cutting production and shedding jobs at underused factories as they lose customers to Toyota and other Asian brands.
Toyota has been zooming past its rivals in the U.S. and Canadian markets. It grabbed a 12.4 percent share of the Canadian market last month -- its highest ever -- even as overall car sales have contracted.
Last year, Toyota produced 1.513 million vehicles at its four North American factories, excluding a plant in Tijuana, Mexico, that opened in December. Total output exceeded the four plants' official capacity of 1.48 million units, not counting overtime.
With the addition of the plant in Mexico and one in San Antonio, Texas, due to begin operations next year, Toyota will be able to build 1.66 million vehicles a year in North America.
Woodstock is a short drive from Toyota's plant at Cambridge, Ontario, which builds the Corolla, Matrix and Lexus RX 330 -- the only model of the luxury Lexus line built outside Japan.
Lower employee health costs for companies in Canada because of its universal public health care system have been cited as a reason that automakers, including Honda Motor Co., have invested in Ontario, Canada's industrial heartland. The province now produces more vehicles than Michigan, the traditional center of the U.S. automotive industry.
"It's the place to be for investors looking for stable, predictable business costs, free from the spiraling health costs plaguing many parts of the world," Ontario Premier Dalton McGuinty said in a statement welcoming the plant.
"We've always said medicare is one of our competitive advantages - and Toyota has chosen the stability that medicare provides investors in Ontario."
The Ontario government said it will invest up to $57 million in the project, including support for training and infrastructure.
The new Toyota factory in Woodstock is the first assembly plant to be built by any automaker in Canada since 1995.