Toyota Motor Corp plans to build new auto assembly plants in Mexico and China, ending a self-imposed three-year break from expansion over quality concerns due to massive recalls.
Toyota on Wednesday said it would invest US$1 billion in the plant in the Mexican state of Guanajuato, creating 2,000 jobs to make the Corolla compact car, the firm’s second-biggest seller in the US.
Production is to start in 2019, with annual output estimated at 200,000 vehicles. That will consolidate Corolla production for North America in that plant and Toyota’s plant in Blue Springs, Mississippi.
Photo: AFP
Toyota will stop producing Corollas at its plant in Ontario, Canada, which will instead focus on more expensive mid-size vehicles. Toyota did not give specifics. The plant now produces Lexus models, the RAV4 sport-utility vehicle and the Matrix hatchback, in addition to the Corolla.
Toyota is adding a third assembly line next to its plant in Guangzhou, China, investing ￥52.5 billion (US$440 million). The line is to be completed by 2017, for a model it declined to disclose.
Annual production capacity will go up by 100,000 vehicles. The new line will not create new jobs because the existing two lines will become more efficient, reducing the number of workers needed, according to Toyota.
A Toyota executive, briefing reporters in Tokyo over a video connection from Nagoya, Japan, said Mexico and China were chosen because they are two markets where auto demand is expected to rise in coming years.
Toyota’s investment in Mexico follows a string of major projects by other automakers, and Mexican President Enrique Pena Nieto said it shows the country is as an “optimal place for global companies to invest and thereby expand their presence in the entire world.”
Ford Motor Co is today expected to announce a US$2.5 billion investment to expand Mexican engine and transmission factories to build a new 1.5 liter four-cylinder gasoline engine and complex multi-speed transmissions.
Pena Nieto said Mexico’s advantages include qualified workers and good labor relations.
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