TOKYO, Aug 6 (Reuters) - Japan’s Toyota Tsusho Corp (8015.T: Quote, Profile, Research, Stock Buzz) is conducting a feasibility study with Brazil’s state-run energy company Petrobras into the possibility of building an ethanol plant there, a company spokesman said on Wednesday.

“At this point all we can say is that we are conducting a feasibility study into the possibility of producing ethanol from sugar canes, together with Petrobras,” he said.

A Brazilian newspaper reported on Tuesday that Toyota Tsusho, the trading company of the Toyota group that also includes Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz), is finishing studies to build an ethanol plant in Brazil’s centre-west state of Goias. [ID:nN05314638]

Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz) and local cane producers would be partners in the new mill that would be built in the Itumbiara area, the financial daily Valor Economico said. (Reporting by Miho Yoshikawa; editing by James Jukwey)

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Although Toyota is best known for making fuel efficient vehicles – including the best-selling hybrid on the planet, the Prius – the Japanese automaker does make its fair share of SUVs and trucks. Despite its green image, Toyota has not been able to outrun the slumping truck market and has announced job cuts at its SUV plant in Japan.

Toyota has cut 800 contract jobs at its Toyota Motor Kyushu Inc. plant in southwestern Japan, largely due to the slumping U.S. market. The Japanese plant produces the Lexus RX and Toyota Highlander SUVs for export, according to Automotive News.

Toyota has already idled Tundra pickup truck and Sequoia SUV production here in the U.S., and will soon switch Tundra production exclusively to its Texas plant. Once the Tundra makes the switch, Toyota will add the Highlander to the Tundra and Sequoia’s Princeton, Indiana plant.

Through the first six months of the year, Toyota’s sales were down 11.8 percent.