Toyota Motor Corp will add a new assembly line to its Chinese joint venture, enabling it to boost production and challenge rivals General Motors Corp and Volkswagen AG.

The company's venture with Guangzhou Automobile Group Co has agreed to invest US$3 billion yuan (US$436 million) to build a second production line in its Guangzhou factory, Guangzhou Toyota said yesterday.

The new assembly line, scheduled to start work in mid-2009, will make Camry sedans and new models. Guangzhou Toyota's production capacity will be boosted by 60 percent to 320,000 units a year initially, and double to 400,000 units when the second line is in full operation.

Guangzhou Toyota faced a capacity shortage since it announced plans to make the Yaris compact car as well as the Camry in its factory.

The company aims to sell 210,000 cars in China this year, including 175,000 Camry and 35,000 Yaris models, exceeding the existing production capacity of 200,000 units.

Toyota is struggling to add capacity in China and introduce more models, having delayed its entry to China after GM and Volkswagen.

Toyota aims to boost its total vehicle sales in China by 40 percent to 700,000 units this year, while its total production capacity is at 640,000 units. The gap could widen as it plans to achieve total sales of 1 million vehicles in China by 2010 and win a 10-percent market share.

Toyota also runs five factories in partnership with FAW Group Co, China's second-largest auto maker, making Corolla, Reiz, and Vios sedans in Tianjin Municipality.

(Shanghai Daily June 19,2008)