Starting in the second half of 2019, Toyota Brazil will add Corolla engine production at its Porto Feliz plant, in São Paulo state.
The automaker is spending BRL600m/$190m, will create 200 jobs, and plans to manufacture 66,000 units of the additional engines a year.
Currently, 1.3- and 1.5-litre four cylinder engines, both flexible-fuel and petrol-only, are made there. They are installed in the locally made Etios compact car sold in Brazil, Argentina, Uruguay, Paraguay and Peru.
The plant is Toyota's first of this type in Latin America and has introduced new technology for the foundry, machining and assembly processes with very low emissions.
Toyota initially spent BRL580m to build the engine plant and the additional spend will hike capacity to 174,000 units a year.
Details of the new engine have not been announced but it is believed to be a powerplant more sophisticated than today's 1.8- and two-litre motors currently imported from Japan for the Corolla.
Local rumour suggests this will be the first engine from the partnership with BMW and destined for the next generation Corolla which will also be made in Brazil. [BMW already supplies diesel engines to Toyota Europe - ed.]
The current Corolla saloon will get a midlife update in this first half of 2017 but no powertrain changes are planned. Corolla leads the medium-size saloon segment here by a wide margin.
This is not the only big investment automakers in Brazil have announced. Despite last year's production and sales plunge, and current 50% excess capacity, both MAN Latin America (unexpectedly) and Volkswagen (expected), both recently announced plans to develop new models.
This will result in BRL9.1bn/US$2.8bn of spending in the next five years by just these three automakers.
"New announcements are expected in coming months", Antônio Megale, president of manufacturers' association Anfavea, said.