The carmaker Toyota has no plans to close plants in western Europe and switch production to lower-cost plants in central and eastern Europe, according to the head of its European operations.

However, Tadashi Arashima, president of Toyota Motor Europe, said the company - which built almost 640,000 vehicles in Europe last year, including almost 265,000 at its plant at Burnaston in Britain - would invest in central and eastern Europe to meet the growth in domestic demand from the region. Toyota, which has a joint venture with PSA Peugeot Citroën in the Czech Republic, has recently stepped up production at its engine plant in Jelcz-Laskowice in southern Poland by adding a second shift and is building a car assembly plant in Russia.

"We have no intention of closing our western European factories and moving to eastern and central Europe," Mr Arashima said.

"The reason we are building a factory in Russia is that growth comes from central and eastern Europe, and Russia. The plants we are building in central and eastern Europe will not be substitutes for western European ones."

Asked where it would be located if Toyota were to build a new plant in Europe, Mr Arashima said: "It is very difficult to say. It is not just a question of the costs of labour - it is more complicated."

Much would depend on which models were in demand, he said. "The western European market is probably saturated but it is not static," he said. Toyota would have to ensure its production took account of changes in customer preferences.

Asked why Toyota was still investing in Britain at a time when other carmakers were cutting back, Mr Arashima said: "Once we commit, we are committed. If costs are higher, then we have to reduce costs as much as possible. We have to increase operational efficiency."