The news comes as Ford confirmed that it is to build cars for Mazda at its plant at Dagenham, and Honda may expand the range of models made at Swindon.
Analysts believe the investments should raise output of cars from the UK by almost 50 per cent to 2.2 million vehicles by the year 2000, making it the fastest- growing producer in Europe.
Toyota, which produces the Carina E at Derby, is to add production of Corolla models to rival the Ford Escort, Volkswagen Golf and Vauxhall Astra.
The move will almost double output at Derby to 200,000 cars a year. Toyota currently employs about 1,900 in the UK, and the expansion is expected to create a further 500 jobs at the assembly plant and another 1,000 in other areas of the industry.
Production of the Carina this year is expected to be 90,000. The Derby plant opened at the end of 1992 and last month Tim Eggar, the industry minister, drove the 100,000th Carina E exported from Britain onto a transporter ship bound for Denmark.
Ford yesterday confirmed that it will build Fiesta-style cars at Dagenham for Mazda, the only one of the big Japanese companies without a European manufacturing plant. Ford, which owns 24.5 per cent of Mazda, said the cars will go on sale in Europe in spring 1996.
Ian McAllister, chairman of Ford of Britain, said: "Dagenham has proved it can achieve high levels of quality and productivity and this agreement with Mazda recognises the plant's competitiveness.''
Meanwhile, Honda is to go ahead with expansion of its Swindon factory with a further investment of up to £200m by the end of the decade. The company plans to produce new models at Swindon, but has not revealed which marques. Possible new products include four- wheel-drive vehicles.
Japanese manufacturers are preparing for the forecast up-turn in European car sales, but are also desperate to escape the high cost of the yen.Reuse content