WOODSTOCK, Ont. - Toyota's Canadian manufacturing arm announced Wednesday it will invest $80 million to increase production at its Woodstock, Ont. assembly plant, a move it says will create some 400 new jobs.

Toyota Motor Manufacturing Canada Inc. said it will ramp up production of its RAV4 crossover vehicles to 200,000 vehicles at the plant by early 2013, an increase from the current annual capacity of 150,000 vehicles.

The Woodstock facility currently employs about 2,000 workers.

Toyota has faced production problems due to last year's earthquake and tsunami in Japan and massive flooding in Thailand that cut parts supplies and slowed down their global output, even in Canada.

But sales have begun to spring back recently, with Toyota Canada reporting sales rose 31 per cent year-over-year in February with 12,384 Toyota, Lexus and Scion vehicles sold.

"We are optimistic that the market is coming back and we're grateful for the strong sales of the RAV4 in the North American market, which has created this increase in production and jobs," said TMMC chairman Ray Tanguay said.

Ontario has seen traditional Detroit Three carmakers -- GM, Ford and Chrysler -- cut tens of thousands of jobs in the last decade as their parent companies restructured in the United States. But Toyota and Honda have expanded their operations in Ontario, Canada's manufacturing heartland.

The company has already announced plans the first Toyota electric vehicle to be built in North America, the RAV4 EV, would be made in Woodstock beginning this year.

Canada's Minister of Industry Christian Paradis lauded the company, saying the move will help to strengthen Canada's automotive industry.

"Our government welcomes the news of increased production at Toyota's Woodstock plant, and congratulates the company on the success of the RAV 4," he said in a statement.

"Together, Toyota's Canadian plants represent one of the company's largest, most successful manufacturing operations in the world, leading to jobs and growth in those communities and for Canadians."

Ontario's Minister of Economic Development and Innovation Brad Duguid said the investment will result in more jobs for Ontario auto workers.

"This is great news for the auto industry in Ontario and shows the strength and diversity of the sector in the province. This expansion demonstrates that Ontario made the right decision by supporting the development of Toyota's manufacturing presence here in Ontario."

Toyota began its Canadian operations in 1986 in the southwestern Ontario city of Cambridge.

It currently employs about 6,500 Canadians at two plants in Cambridge and one in Woodstock, where the Toyota Corolla, Toyota Matrix, Toyota RAV4, and the Lexus RX 350 vehicles are manufactured.