The company, which yesterday confirmed plans to begin production of a second model, said the expansion would bring the total amount Toyota had invested in the UK since 1991 to more than £1bn.
News of the investment came as BMW announced that its Rover division contributed DM12m (£4.8m) to total group profits of DM697m, up 35 per cent. Rover's profits, which are for the last nine months of 1994, are not comparable with 1993 because they are based on more conservative German accounting practice. Analysts calculate that Rover's total 1994 profit before interest and tax was £80m-85m.
Toyota yesterday said that production of its top-selling Corolla would begin in 1998, and 1,000 would be added to the current 1,900 employees. The factory, at Burnaston, currently makes the Carina E model.
Yukihisa Hirano, managing director of Toyota UK, said that for every job created at the plant another three could be generated among suppliers. Eighty per cent of cars from Burnaston have local content.
Toyota plans eventually to double production of cars at Burnaston to 200,000. The plant produced 85,000 vehicles last year, and is expected to make 90,000 in 1995. The Corolla, smaller than the Carina E, is Toyota's biggest-selling car and is made on every continent except Europe.
The high value of the yen is forcing Japanese companies to manufacture outside Japan. But Toyota is also preparing for the expected rise in European car sales in the latter part of the decade. It said it did not asked the Government for grant aid and none was offered.
Alan Pulham, director of the National Franchise Dealers' Association, said Toyota's long-term commitment to the UK was encouraging. "It will not suddenly change the world today or tomorrow or next year, but the company is investing for the late 1990s and early 21st century.''
Graham Dymott, of the Society of Motor Manufacturers and Traders, said: "It is very good news, not least for the components industry."
About 75 per cent of Carina production is exported to 16 European countries. More than 130,000 Corollas were sold in Europe last year, making it the best-selling car imported on the Continent.
Meanwhile, John Towers, Rover's chief executive, said the company was planning an eventual return to the US, abandoned after the costly failure of its Sterling model. Mr Towers said the company was working on a model suitable for the American market, but would not comment further.Reuse content