Toyota to spend $172 mln to raise U.S. engine output

Toyotas investing $172M to raise North American production of small 4-cylinder engines, at a time when the U.S. market shows signs of recovering from its worst downturn in decades. Toyota will spend $147M at its Huntsville, AL engine plant to more than double annual capacity there to 577,000 engines. The plant, which currently builds bigger V8 & V6 engines only, will start building more fuel-efficient 4-cylinder engines beginning in the summer of 11. Engines will be used for its Camry sedans & RAV4 SUVs. Toyota will also spend another $25M at its aluminum casting plants in Troy MO & Jackson TN, to expand output of engine components like cylinder heads & block. The expansion in NA, which Toyota estimates will create 300 jobs, comes as the Japanese automaker tries to move production closer to where it sells in an effort to hedge against a strong yen. U.S. auto sales rose to their highest rate of 09 in July, boosted by the U.S. govt's "Cash for Clunkers" incentives offering up to $4,500 to people who trade in old gas guzzlers for more fuel-efficient vehicles. Analysts & auto industry execs have forecast Aug would show a better selling rate than July, bolstering expectations that the worst of the downturn had passed.