Toyota to make truck parts in Mexico

Toyota Motor Corp will build its first automobile parts plant in Mexico as the largest Japanese automaker seeks to meet rising North American demand for its cars and light trucks.

The automaker selected a 700-acre site near Tijuana in the state of Baja California to build and ship truck beds for Tacoma pickup trucks, which are then assembled at a joint venture factory with General Motors Corp in Fremont, California.

The undisclosed investment comes as Toyota plans to start selling cars in Mexico for the first time this year. The nation's sales of domestic-built cars and trucks rose 3.8 percent to 815,240 vehicles through November, almost twice the number in first 11 months of 1997.

Exports rose to 1.31 million vehicles through November, up 44 percent from the comparable period of 1997, as automakers turned to the nation's cheaper labor.

"Toyota wants to do business in Mexico and they have created an internal group designed to set up Toyota de Mexico," said Gordon Wangers, president of Automotive Marketing Consultants Inc.

in Vista, California. "There's a good chance" that the company will build an assembly plant there, he said.

Toyota declined to provide the amount of its investment, square footage or how many workers will be employed because it's still working on those details, said spokesman Mike Michels.

Construction begins this year with production starting in 2004.

The Tijuana plant will replace a pickup-truck bed production line in Long Beach, California, that employs 540 workers. The production line built about 180,000 truck beds annually. No workers will lose their jobs because instead they'll build catalytic converters, steering columns and other parts, he said.

Baja Governor Eugenio Elorduy Walther announced the factory today in Tijuana at a ceremony also attended by Toshiaki Taguchi, chief executive officer and president of Toyota Motor North America. Toyota is North America's fourth-biggest automaker and by next year will employ 33,000 in the US, Canada and Mexico.

Japanese automakers began US vehicle production in the 1980s, with Toyota, Honda Motor Co, Nissan Motor Co constructing plants. Toyota was one of the last Japanese companies to make the move, opening a Georgetown, Kentucky, factory in 1988.

Toyota said in July that it plans to start selling vehicles in Mexico in the second quarter of this year.

The company may end up actually building vehicles in Mexico as early as 2005, predicted Mike Wall, an analyst at IRN Inc, a Southfield, Michigan-based firm that provides consulting services for auto-parts suppliers.