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Automobile

Toyota to invest $2.8bn for R&D hub in green-car push

The Japan site includes test tracks and is aimed at meeting regulations worldwide

Toyota's green-vehicle lineup includes plug-in hybrids, such as the Prius pictured here.

NAGOYA, Japan -- Toyota Motor will create a research and development hub in Japan to step up its development of a broad range of environmentally friendly vehicles and meet regulations in various markets.

The site will be located in the automaker's home prefecture of Aichi, which includes Nagoya, and come with 11 types of test tracks. Total investments are projected at around 300 billion yen ($2.8 billion).

A vast tract of land -- roughly 650 hectares -- has been secured for the project. The facilities will open partially as early as next year and fully in 2023.

The project will "contribute to accelerate research and development for a motorized society in the future," Toyota Executive Vice President Shigeki Terashi said at an event Monday.

The test tracks will be designed to reproduce various driving conditions around the world. One will be in part modeled after the well-known Nurburgring race course in Germany, to test the stability of steering, braking and other functions in harsh driving conditions. The 5.3km track will include mountainous roads with many curves, and an altitude gap of some 75 meters between high and low points.

Engineers and other employees will be reassigned from Toyota's headquarters and other locations to the new R&D base. A staff of between 3,200 and 3,300 is expected when the site goes into full operation, with plans to eventually increase it to 3,850. The test tracks will be the company's first in Japan since opening a testing site in 1984 on the northern island of Hokkaido.

Toyota aims to increase annual sales of electrified vehicles to at least 5.5 million units by 2030. As the automaker pursues a comprehensive lineup including hybrids and fuel cell vehicles, existing development facilities have become increasingly crowded. The new R&D base is also intended to help accommodate the needs of consumers and ensure regulatory compliance -- not just in advanced economies like Japan, Europe and the U.S., but also the emerging economies of China and India.

The new R&D base will include 11 test tracks.

The automaker plans to use the Hokkaido site for cold-environment driving tests and reserve existing testing spaces in Shizuoka Prefecture for next-generation technologies. The new site will be used to test vehicles set to debut in the near future.

Toyota's R&D and capital spending is estimated to total 2.34 trillion yen for the current year ending March, an increase of 40% over five years. As upfront investments weigh heavily, the company has recently been collaborating with other companies, forming an electric-vehicle technology joint venture with Mazda Motor and parts maker Denso, for instance.

In the U.S., meanwhile, Toyota has been focusing on developing such cutting-edge technologies as artificial intelligence and autonomous vehicles. The Toyota Research Institute, established in Silicon Valley in January 2016, plays a central role on this front. In Michigan, home to Toyota's North American R&D center, the Silicon Valley unit created a research center for fully autonomous vehicles that year.

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