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Toyota adding 400 jobs at Ontario plant

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Toyota Motor Manufacturing Canada Inc. will add 400 jobs at its Woodstock, Ont., plant to boost production of RAV4 crossover utility vehicles.

Production will rise to 200,000 units annually in early 2013 from the current level of 150,000 a year with an $80 million investment that will remove bottlenecks and improve production processes to allow the increased output.

The plant, which began production in the midst of the recession in late 2008, employs about 2,000 people.

The RAV4 is one of the company's best-selling models in Canada, but the majority of the vehicles assembled at the plant are shipped to the U.S. market. Sales of the model fell about 7 percent in the first two months of the year to 22,498 from 23,758 in the U.S. market, but executives with Toyota's U.S. sales arm have said that's based in part lack of availability.

The Woodstock expansion is the latest sign that the recovery in the North American auto market is gaining strength amid improving economic fundamentals, growing consumer confidence and rising gas prices.

Americans are trading in vehicles that on average are more than 11 years old, for new models that are more efficient as they face gas prices that are a shade below $4 US a gallon and not far from the record high of $4.11 a gallon reached in July, 2008.

The expansion announcement comes about nine months after the federal and Ontario governments provided loans and grants of about $500 million to the auto maker.

The boost in production was under consideration when that announcement was made last July, Brian Krinock, president of Toyota Motor Canada said Wednesday.

Now, the market is improving, Krinock noted, pointing to the seasonally adjusted annual sales rate in the United States rising to 15.1 million vehicles in February.

"People are feeling a little more comfortable about investing in a capital product," he said.

"Last year because of the tsunami and the Thailand flooding, we struggled to make some product. We didn't sell enough of those vehicles and I think there's a pent-up demand for the RAV."

The government financing also helped the Woodstock plant win the contract to assemble electric versions of the RAV4.

Toyota also assembles Corolla, Matrix and Lexus RX350 models at a plant about an hour away from Woodstock in Cambridge, Ont.

It now employs about 6,500 people.

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