June 26 (Bloomberg) -- Toyota Motor Corp., Japan's biggest automaker, plans to invest more than $1 billion to build a new factory in Brazil's Sao Paulo state, Valor Economico reported, without saying where it got the information.

The factory will manufacture engines in addition to producing small cars, the newspaper said. Toyota plans to make more than 200,000 cars a year at the plant, it added. The factory should be ready by 2010, Valor said.

Toyota is in the final phases of deciding where in Sao Paulo state to build the factory, Valor said.

To contact the reporter on this story: Anabela Reis in Lisbon at areis1@bloomberg.net.

Last Updated: June 26, 2008 05:42 EDT