Toyota to build new SUV plant in Mississippi

NEW YORK (CNNMoney.com) -- Toyota Motor Corp. said Tuesday it will spend $1.3 billion to build a new sport/ utility vehicle plant in Mississippi, creating roughly 2,000 jobs and making it its fifth assembly plant in the U.S.

The 1,700-acre plant, which will be dedicated to building the Highlander sport utility vehicle, will be located just outside of Tupelo, in Blue Springs, Miss., Toyota said.

"We in Mississippi and especially North Mississippi are excited to have been chosen by Toyota as its partner," Mississippi Governor Haley Barbour said at a news conference in Tupelo Tuesday morning.

The Toyota plant, which is scheduled to begin production by 2010, will produce approximately 150,000 gasoline-powered Highlander vehicles every year.

The Blue Springs plant will be Toyota's fifth vehicle assembly plant in the U.S. and the automaker's eighth in North America.

The automaker currently operates vehicle assembly plants in San Antonio, Texas, Princeton, Ind., Georgetown, Ky., and Fremont, Calif., in addition to a handful of engine plants.

Several states, including Tennessee and Arkansas, were vying for the new plant, according to Toyota executives, who characterized the competition as "tough."

"We did our homework and studied hard before making a decision," said Ray Tanguay, Toyota manufacturing executive vice president.

Barbour said Toyota's incentive package was on par with the package it offered Nissan (Charts) to lure the rival automaker to build its Jackson, Miss., plant, which opened in 2003.

The announcement by Toyota comes as its U.S. rivals General Motors (Charts) Ford Motor Co. (Charts) and Chrysler Group, the U.S. unit of DaimlerChrysler (Charts), have announced their own plant closings and deep staff reductions.

Last month Toyota took the No. 2 spot in U.S. auto sales, driving past Ford Motor Co. but behind General Motors. Toyota is expected to drive past Ford in annual U.S. sales some time this year and GM in terms of global sales.

Toyota, which sold 2.5 million vehicles in the U.S. last year, has seen its domestic sales more than double since 1996.

As a result of its booming U.S. demand, Jim Press, president of Toyota Motor North America, stressed the importance of investing in the U.S. economy, such as the Blue Springs plant.

"Our commitment is to build cars where we sell them," Press said.

Press said there are no immediate plans by Toyota to build any additional production facilities in North America.

Toyota (down $2.68 to $134.35, Charts) shares were 1.6 percent lower in early afternoon trade on the New York Stock Exchange.

--CNN's Katy Byron contributed to this report

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