Toyota is to spend $US200 million to triple its vehicle output in Argentina, with most for export, Reuters reported.
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Toyota told Reuters that the rare investment in the country troubled by recession would take advantage of cheap labour costs.
“But this goes way beyond a decision based just on the currency,” Toyota spokesman Daniel Afione told Reuters. “The quality of labour in Argentina is excellent and the quality of the product is good also.”
According to Reuters, Toyota said the expansion would boost capacity at its plant outside Buenos Aires to 60,000 units per year by 2005, of which 45,000 are likely to be exported to South and Central American countries.
Toyota’s sales in recession-hit Argentina fell 45% in the first eight months of 2002 compared to the same period a year before, marginally better than comparable industry-wide figures, Afione told Reuters.
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By GlobalDataPart of the investment will also be used to develop additional auto parts inside Argentina from both in-house production and third-party providers, Reuters said.
Afione told Reuters that Toyota believed Argentina’s economy would turn around by next year, allowing for a recovery in domestic demand that would eventually return to levels seen in 1997, when the company began production in Latin America’s third largest economy.
