Toyota Motor Corp. plans to build a new plant in continental Europe to produce diesel engines for Yaris compact cars, the European version of Vitz, company officials said Saturday.

The new facility will probably be added to the site of the company's Polish plant in Walbrzych, about 500 km southwest of Warsaw, which will start production of manual transmissions in 2002, the officials said.

But Toyota may choose to build the engine assembly lines at its plant in Valenciennes, northern France, its second European manufacturing base, which will begin manufacturing the Yaris next month, the officials said.

Japan's top automaker plans to make a decision on the site of the engine plant and hopes to start production there around the summer of 2003, they said.