BEIJING — Toyota Motor has plans to triple its production capacity in China to about 900,000 vehicles per year by 2010, says a report in the Asahi Shimbun newspaper in Japan.

Meanwhile, year-on-year passenger vehicle sales in China surged by 50 percent, to 1.7 million units, in the first four months of 2006, according to the China Association of Automobile Manufacturers.

Demand for vehicles in China has been spurred on by widespread price reductions. Analysts predict that sales will hit 5 million units this year, up from just less than 4 million in 2005.

The Japanese newspaper reports that Toyota's plans include a second factory in Guangzhou that will begin production by the end of 2008. Adding that plant will increase Toyota's China production by 200,000 units beyond what the automaker had previously planned.

What this means to you: China is still a red-hot market, and the big players like Toyota are planning to cash in on it.