Rio de Janeiro, Aug 9 (IANS): Japan's automobile manufacturer Toyota has announced an investment of 1 billion reais ($500 million) to set up an engine factory in Brazil.

The announcement Wednesday was made by President and CEO Akio Toyoda of the auto company, Xinhua reported.

The new project, which will be located in Sao Paulo state, will create a total of 600 new jobs, and the locally made engines would also promote the level of local production of Corolla and Etios, two of Toyota's car models.

"With almost all components made here, we can say that the Etios will be a Brazilian car, made for the Brazilians," he said.

He also said that to install more components made in Brazil in Toyota-brand cars is a sign of the company's "gratitude and cooperation" with the Brazilian society.

Akio Toyoda is in Brazil for the inauguration of a new Toyota plant, which is also in Sao Paulo state.

The plant, Toyota's third in Brazil, will generate 1,700 direct jobs, with an anticipated production capacity of 70,000 cars annually. Toyota currently employs over 4,000 people in Brazil.