TOKYO ? Toyota Motor Corp. will spend hundreds of millions of dollars to build a research centre in China to develop vehicles for the fast growing market there, a newspaper said Thursday.

The world's largest automaker will build a new center with a full-scale test course near Shanghai, the Nikkei business daily said, adding construction was likely to begin as early as next year.

Total investment would reach 30-40 billion yen ($330-440 million), it said without naming its sources.

If it gets Chinese approval, Toyota will become the first Japanese automaker to establish a Chinese research and development centre funded solely by itself, it said.

The new facility would employ several hundreds of people, including local engineers, to enable the company to pick up on local trends, it said.

Toyota has dropped its business strategy of selling the same models worldwide, deciding instead to customize its vehicle offerings to the characteristics of each region, it noted.

China is expected to overtake the United States this year as the world's biggest automobile market but Toyota's share in new car sales there is only six percent, it said.

No immediate comment on the report was available from Toyota.

The Japanese company, which was due to announce its interim financial results later Thursday, fell into the red for the first time in the year to March 2009 and has forecast another loss this year.