Toyota, Japan's biggest car group, yesterday unveiled plans for a $670 million greenfield plant at Valenciennes in northern France near the Belgian border to position itself for a larger European market share in the next century. Mr Hiroshi Okuda, the Toyota president, did not give a specific reason for the selection of France. But he said it was a combination of Toyota's need to raise its market share in France, its need to have a presence in continental Europe, its need to be inside the euro zone and the site's communications with Toyota's existing plants, notably in the UK.
The new small car to be produced at the plant will initially have a 60 per cent "European content" thus qualifying it to be classified as European.
Engines are likely to be sent from the company's Deeside factory in Wales, established to feed the existing Burnaston plant in the British midlands.
Mr Okuda said Toyota had applied to the French government for a subsidy but details had yet to be finalised. In the motor industry there was talk yesterday of up to 10 per cent in various subsidies.
French officials said among the subsidies being considered were tax breaks, the waiving for a period of some social security contributions and aid in training the proposed 2,000 strong workforce. In addition the town of Valenciennes is expected to waive or reduce the annual property tax on the site while contributing to the establishment of Japanese-French schooling.
The plant is due on stream in 2001 but from 1999 Toyota will import its new range of small cars into France. Toyota executives said the group hoped to raise its current 1.1 per cent share of the French market to around 5 per cent with the new plant. At present Toyota only has 2.8 per cent of the EU market. But Mr Okuda said the group was looking for expansion not only in the EU but also in eastern and southern Europe.
Toyota had not been deterred from coming to France by high labour overheads and the Jospin government's plan to introduce a 35 hour week, he said.
