The Associated Press

ERLANGER - Officials at Toyota's North American manufacturing headquarters in Erlanger broke ground Thursday on an expansion that will increase its capacity.

The 98,400-square-foot expansion of the company's quality and production engineering lab will cost $15.6 million, company spokesman Dan Sieger said Thursday. It will serve as Toyota's center for parts, components and materials testing, warranty claims analysis and integrating suppliers into design and manufacturing processes, Sieger said.

The company's North American manufacturing headquarters occupies 260,000 square feet on a 42-acre site, Sieger said. Toyota employs more than 8,300 people at three locations in Kentucky, including 850 in Erlanger.

"This facility will strengthen Toyota's North American quality systems," said Gary Convis, executive vice president of Toyota Motor Manufacturing North America, Inc.

Toyota has the capacity to build 1.48 million vehicles a year in North America, but wants to increase that to 1.66 million by 2006, Sieger said.