Tokyo  - Toyota Motor Corp and Matsushita Electric Industrial Co have decided to boost production of batteries for eco-friendly hybrid cars by 2011, The Nikkei daily reported Friday.

The two companies plan to build two factories in Japan to increase production of lithium-ion and nickel-metal hydride batteries to meet growing demand for Toyota's gas-electric hybrid cars.

It would be the first time for Japan's leading automaker to produce lithium-ion batteries.

Nissan Motor Co and NEC Corp announced Monday their plan to start production of lithium-ion batteries through their joint venture by fiscal 2009 with an initial annual output capacity of 13,000 units.

Toyota and Matsushita were expected to invest 20 billion yen (193.51 million dollars) in a joint venture Panasonic EV Energy Co for the construction of the two plants.

The nickel-metal hydride battery plant in northern Japanese province of Miyagi was expected to start operation in 2011 with annual production capacity of batteries for about 300,000 cars.

The lithium-ion battery factory in central Shizuoka prefecture would begin producing batteries for a few tens of thousands of hybrid cars in 2010, the Japanese business daily said.

The planned production increase is in line with Toyota's target to increase gas-electric hybrid models to around 10 per cent of its annual global production of about 10 million units by early 2010s. (dpa)