The location is near its Indiatuba factory that builds the Corolla. The new plant would have a starting annual production capacity of approximately 150,000 vehicles.

A report in the Nikkei on the announcement noted that automobile sales in Brazil have been growing by 30% annually, with cars having engine displacements of about 1.0 liter accounting for half the market.

Volkswagen, Fiat and General Motors dominate sales in the country. The Toyota Corolla holds only about 2% of the Brazilian market, even including imports from Japan and Argentina.

Japanese automakers have generally focused on the US and larger cars overseas, which “was the right choice to secure development resources,” said President Shozo Hasegawa of Toyota’s Mercosur unit. But now they urgently need to market smaller cars worldwide in addition to those catering to the developing world.