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Toyota, FAW Build New China Engine Plant

Toyota Motor and its Chinese partner FAW announced on Friday a new $270 million factory in the coastal city of Tianjin with annual output capacity of 220,000 engines.

Toyota , the world's second-biggest automaker, and FAW, ranked second in China, already operate a 220,000 units-a-year engine factory through Tianjin FAW Toyota Engine, a 50:50 joint venture that supplies engines for the Vios, Corolla and other models built by the partners' vehicle assembly venture.

The new plant will begin producing engines for the new Corolla sedan starting in mid-2007.

The vehicle joint venture is scheduled to begin making Toyota's new Corolla in the middle of this year at a third factory with planned capacity of 200,000 cars a year.

The new engine factory will build 1.6-liter and 1.8-liter ZR engines, featuring Toyota's most advanced fuel economy and environmental technology called Dual VVT-I, or Variable Valve Timing-intelligent -- the first time these have been made outside Japan.

With the start of production at the new plant, output of the ZZ engine at an existing factory will be discontinued and capacity lowered to 130,000 units a year, Toyota said in a statement.

Toyota, which also has a separate joint venture in China with Guangzhou Automobile, aims to increase its sales in China by 43 percent this year to 430,000 units, and take 10% of the overall vehicle market by 2010.

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