Toyota Motor Corp. will construct its first assembly plant in Myanmar as the Southeast Asian nation is set to increase barriers on imports to boost foreign investments and bolster its local auto industry, the Nikkei Asian Review reported May 27, citing sources.

The new plant that the Japanese carmaker will build in the Thilawa Special Economic Zone, outside Myanmar's commercial capital Yangon, will initially manufacture up to approximately 10,000 pickup trucks annually, the report said.

An announcement from Toyota is reportedly expected by the end of May. According to the newspaper, the automaker will initially spend "tens of millions of dollars" on the facility. The move is seen as an opportunity to attract auto parts suppliers and automakers in the country, the report added.

Toyota was previously cautious about a foray into Myanmar because of the country's small market, largely undeveloped infrastructure and the challenges of securing local suppliers, despite operating in five Southeast Asian countries including Thailand and Indonesia, the Nikkei said.

Meanwhile, the Myanmar government hopes that an influx of auto investments will help generate jobs as locally produced cars receive tax breaks and are not subject to steep registration fees.

The report added that the next move for Toyota would be to establish a supply chain in Myanmar although only a few suppliers could meet the automaker's exacting standards.

"While we at Toyota are constantly exploring business opportunities, no decisions have been made and we have nothing to share at this point in time," a spokesperson for the carmaker told S&P Global Market Intelligence in an email.