Brussels - Toyota will decide next year whether to build a European assembly plant to produce a new small car.
The maker will show a prototype of the car at the Frankfurt auto show in September.
President Hiroshi Okuda said production would start about 2000, but the car could be on the market in Europe before the plant is ready. Okuda said the small car would probably be built in Japan initially and exported to Europe.
The car will be co-developed with Daihatsu, which is partly owned by Toyota, and may be sold both as a Toyota and a Daihatsu. It is expected to compete with minicars like the Ford Ka, Renault Twingo, Seat Arosa and Nissan Micra.
Okuda said Toyota had not decided on the new plant's location, and would consider proposals from several countries and regions. But he said Toyota was looking first at meeting logistical criteria before considering incentive packages.
Toyota's new Corolla, introduced this month, will also be exported from Japan until Toyota's plant in Burnaston, UK, starts producing the car next year. Okuda said capacity at Toyota's engine plant in north Wales would be raised by 50 percent to 200,000 units a year for the Corolla start-up. Toyota will invest £60 million ($98 million) at the engine plant.
An all-new Carina will be introduced in 1998. It will be designed and developed in Europe and built at Burnaston. Production at Burnaston is planned to rise to 220,000 cars a year after the Corolla is added. Last year, about 110,000 Carinas were built at the UK plant.
Toyota plans to increase sales in Europe from 410,000 cars in 1996 to 600,000 in 2000.