The new plant will produce Class III warehouse forklifts.

Toyota Industries Corp will set up a factory in Vietnam to make forklift parts and warehouse equipment.

The USD20 million plant will be located in the Thang Long Industrial Park II in Hung Yen Province in northern Vietnam. The 12,000sqm (129,167sqft) facility will be built on a 100,000sqm (1,076,39sqft) site.

Toyota says production is expected to start in April 2012 and the factory's capacity by 2014 would be 50,000 electric forklift parts and 2,000 Class III warehouse forklifts annually.

According to Mainichi Daily News, Toyota will ship the parts to assembly plants in Japan, China, Europe and the US. The company wants to strengthen its cost competitiveness by shifting production from its Takahama plant in Aichi prefecture to Vietnam where labour costs are lower.

Toyota currently manufactures small warehouse equipment in Sweden for shipment internationally. The Vietnam plant will take over exports to India and other Asian markets.