Toyota said it will invest $600 million and create 400 jobs at one of its US plants - just weeks after Donald Trump criticised the Japanese auto giant for planning to open a factory in Mexico.

The US president has pressured automakers, both American and foreign, into boosting production and hiring in the United States, threatening them with punitive tariffs if they move factories and jobs overseas.

"This expansion project is part of Toyota’s localisation strategy to build vehicles where they are sold," the automaker, which was singled out by Trump in a Twitter broadside, said in a statement Tuesday.

The investment is aimed at boosting SUV production at a factory in Indiana, the home state of Vice President Mike Pence.

Toyota currently has 5,000 employees in the plant in the small city of Princeton, part of the approximately 40,000 people it directly employs in the US, a Toyota spokeswoman told AFP.

Toyota said its planned investment of $10 billion in the US over the next five years "shows Toyota’s commitment to continued US investment".

The project to modernise the plant and increase its competitiveness is set to begin in 2019, Toyota said. 

Earlier this month, while still president-elect, Trump threatened Toyota with tariffs over a planned new vehicle plant in Mexico.

"NO WAY! Build plant in U.S. or pay big border tax," he tweeted.

Toyota has said it will build a new factory in Mexico, which is expected to begin production in 2019.