The Toyota Camry is seen during a launch in Bangalore in 2002. Toyota Motor will begin producing a hybrid version of its popular Camry mid-sized sedan at a plant in Kentucky in late 2006, the automaker said.

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Toyota Motor will begin producing a hybrid version of its popular Camry mid-sized sedan at a plant in Kentucky in late 2006, the automaker said.

The hybrid version of the Camry -- perennially among the top-selling US automobiles -- will be the Japanese automaker's fifth gasoline-electric vehicle.

The move comes amid surging demand for Toyota's Prius, the leading hybrid car in the US.

"The continued success of Prius has demonstrated consumers' growing demand for hybrid vehicles," Jim Press, executive vice president and chief operating officer of Toyota Motor Sales USA, said in a statement.

"Hybrid production in the US will allow us to be even more responsive to the desires of our customers."

Nationwide registrations for new hybrid vehicles rose to 83,153 in 2004 -- an 81 percent increase from 2003 according to RL Polk and Co.

The Toyota Prius recorded 53,761 new hybrid vehicle registrations in 2004, a 33 percent increase over 2003. The Prius occupies 64 percent of the hybrid market, a sizeable lead over the Honda Civic, which had 25,586 registrations and 31 percent market share, according to Polk.

Since the introduction of hybrid vehicles in 2000, the market has grown by more than 960 percent, Polk said.

The Camry hybrid joins a growing Toyota and Lexus hybrid lineup in the US, which currently includes the Prius and the Lexus RX sport utility vehicle, which reached dealerships in April. Next month, the Toyota Highlander Hybrid mid-size SUV will go on sale, and the 2007 Lexus GS sedan is targeted for sale in the spring of 2006.

Toyota has not yet announced when the Camry hybrid will hit the market and a spokesman said it is too early to release specific details about the new vehicle.

The decision to build the Camry in the United States -- all other Toyota hybrids are currently produced in Japan -- is a result of the company's longstanding philosophy that it is best to build vehicles where they are sold, the spokesman said.

The Camry will be produced at Toyota's Georgetown, Kentucky plant which currently has the capacity to build 500,000 vehicles annually.

Toyota said a 10 million dollar investment in the plant's capacity will allow it to build approximately 48,000 Camry hybrid vehicles per year.

The hybrid vehicles will be made on the plant's existing lines and Toyota said it expects capacity and employment to stay the same.

The Kentucky plant was established in 1986 and is Toyota's largest plant in North America. It employs approximately 7,000 people and currently builds the Camry, Avalon and Solara.