TOKYO, Japan (Reuters):

Toyota Motor Corp. said yesterday it will build a new plant in the United States, the latest sign of its pressing need for capacity to keep up with booming demand, with media reports placing the factory in the southern state of Mississippi.

Japanese business daily Nikkei reported earlier that the plant, to cost around yen100 billion (US$830 million), would have capacity to build 150,000 units a year and would produce the Highlander sport utility vehicle starting in 2009.

A separate report from Kyodo news agency put the investment figure at yen200 billion and output capacity at 200,000 units a year.

The plant will create about 2,000 new jobs, Kyodo also said,citing sources familiar with the matter.

Reviewing possible locations

Toyota, which may claim the title of the world's biggest auto maker from General Motors Corp. this year, had said it was reviewing possible locations for an eighth vehicle assembly plant in North America in an attempt to boost local production and stem a rise in imports.

Toyota said later it would issue a news release and hold a briefing at 1500 GMT regarding a new factory in the United States, but declined to provide further details.

With a 13 per cent jump in 2006 sales, Toyota sped past Chrysler as the third-biggest car maker in the United States, putting its market share at a record high 15.4 per cent against the U.S. brand's 12.9 per cent.

This year, Toyota is widely expected to edge past Ford Motor Company, having trailed the U.S. icon by just one percentage point last year.

Combined 250,000 units

Ahead of the reported Mississippi plan, Toyota will add a combined 250,000 units in annual capacity in North America by using a line at affiliate Fuji Heavy Industries' Indiana factory this year and opening a new Canadian plant next year.

Late last year, Toyota began production of the Tundra pickup truck at a new 200,000-units-a-year factory in Texas.

It is under pressure to boost production in the region to avoid potential political fallout from a jump in the number of vehicles shipped from Japan to the U.S. Last year, just half of the vehicles it sold in the U.S. were built in North America, compared with a rate of more than 70 per cent for both Honda Motor Company and Nissan Motor Company.

At the current rate of sales growth in North America, some analysts say Toyota would need to add capacity at a rate of one factory every year.