TORONTO - In a sign the troubled Canadian auto industry is beginning to recover with a strong lineup of vehicles North American consumers want to buy, Toyota Canada is hiring 800 more people to raise production of a popular SUV built in southwestern Ontario.

The Japanese automaker said Thursday it plans to introduce a second shift at its new plant in the farm community of Woodstock beginning next March to produce the RAV4.

"Thanks to high demand for this popular vehicle, we are able to increase production in Woodstock," said Ray Tanguay, president of Toyota Canada.

The move is a shot in the arm for the Canadian industry, which has seen the North American carmakers - General Motors, Ford and Chrysler - cut thousands of jobs in the last few years. At the same time, however, Japanese rivals such as Toyota and Honda grew their market share and have expanded their workforces to nearly 11,000 people as they export more and more vehicles to the United States and grow their sales in Canada.

Honda, which employs 4,300 people at assembly and engine plants in central Ontario, makes hot-selling Civic sedans well as other vehicles in Canada.

At Toyota, the carmaker was the largest seller of cars and trucks in Canada last month for the first time ever.

"We are very pleased to be able to continue our growth and provide jobs in the local community," added Tanguay. "This move demonstrates Toyota's continued commitment to North American production and to building where we sell."

In Canada, sales of the RAV4 have increased 24 per cent in 2009 to a total of 23,748 through November. The sport utility vehicle is the company's second most popular vehicle after the Corolla, also built in Canada, and makes up approximately 14 per cent of Toyota's overall sales.

In the U.S., sales of the RAV4 are at 132,346 through November, a four per cent increase over the same period last year.

The new jobs will boost total employment at Toyota Canada to 6,500 people, with 2,000 in Woodstock and 4,500 at the company's other plant in Cambridge, Ont. The automaker said it will begin hiring this month.

The spinoff effects of 800 new jobs at an auto assembly plant are huge, said Tony Faria, co-director of the automotive research centre at the University of Windsor.

"The traditional number used is that there are six or seven jobs created for every assembly line job, and that includes the parts makers, the distribution companies that are bringing parts into the plants or taking the finished product out of the plants, suppliers of all types of services to those plants (and) other businesses that are in the communities," Faria said.

Toyota said it uses 60 Canadian suppliers for production of the RAV4, 50 of which are based in Ontario.

"The increase in RAV4 production means the addition of a second shift in Woodstock, the creation of 800 new jobs, more work for the entire supply chain - and most importantly it means that Toyota has confidence in Ontario's workforce and business climate," said Sandra Pupatello, Ontario's minister of economic development and trade.

"This is a strong and tangible recognition of our highly skilled workforce, our competitive business environment and that Ontario is the best place in the world to build cars," added federal Industry Minister Tony Clement.

Toyota opened the Woodstock plant in late 2008, just as the auto industry slipped into its deepest slump in decades. It was always assumed the plant would operate with two shifts, but falling demand forced Toyota to limit it to one.

"The market's eventually growing back to where it was supposed to be in Toyota's eyes in terms of the capacity they were adding," Faria said.

Demand for Toyota products, which took a beating along with most other automakers, has bounced back strongly in recent months. Toyota Canada sold 16,113 units in November, up 26 per cent from a year earlier.

And Toyota isn't the only company whose Canadian operations have benefited from a popular product mix.

GM Canada said last month it will recall 150 laid-off employees to its CAMI facility in Ingersoll, Ont., to meet strong demand for its 2010 Chevrolet Equinox and GMC Terrain. The company will also bring back 600 workers to its Oshawa, Ont., plant in 2011 to begin production of the company's new Buick Regal.

"I think Canada gets great respect for its productive workforce, for wanting to do business. The Ontario government is very supportive of new investment," said Bill Pochiluk, president of industry adviser AutomotiveCompass.

Pochiluk said it's unlikely any additional hiring binges or expansions will take place in the near future, but the Canadian auto industry will continue to thrive on a strong product mix.

However, as evidenced by the fact that GM is only recalling previously laid-off workers, the Canadian auto industry's current product mix is only helping to offset earlier layoffs and plant shutdowns.

GM closed its truck plant in Oshawa earlier this year and plans to shutter a 1,400-employee transmission plant in Windsor, Ont., next year. Ford plans to close its assembly plant in St. Thomas, Ont., in 2011.

The new shift at Toyota's Woodstock plant will increase RAV4 production to 150,000 vehicles, and the majority of RAV4s for the North American market will now be built in Ontario, Toyota said.

Toyota Canada also builds the Corolla, the Matrix and the Lexus RX350 at its other assembly plant in Cambridge.