At the cornerstone laying ceremony for its new Brazilian engine plant, Toyota said it plans to have 19 suppliers close to the Porto Feliz site, 76 miles west of the city of São Paulo. The town is close to Sorocaba where the Etios hatchback and saloon are produced.
Toyota will buy locally made engine blocks, cylinder heads, crankshafts, camshafts, and non-electronic engine ancillary parts, to start with.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Total spend on the 700 worker, 200,000 engines a year plant alone will top BRL1bn/US$450m. Official opening is scheduled for the first half of 2016 which indicates the pace of construction is not being rushed.
The plant will start with production of 1.3- and 1.5-litre engines for the Etios with 65% local content. Two- and 1.8-litre engines for the Corolla built in Indaiatuba (69 miles north of São Paulo) will follow in less than a year. The new engine plant could be expanded for exports in the future if the cost base reduces in Brazil.
Steve St. Angelo, the American who is president of Toyota Latin America, said: “It breaks my heart to know that Corollas sold in South America come from the [Tupelo] Mississipi plant in the US, not from Brazil.”
Argentina is the only country that buys the Brazilian-made Corolla – under the Mercosur productive complementation deal.
St. Angelo suggested the Brazilian government, industry and unions make efforts to reach international competitiveness.
“My dream is us becoming so efficient we can export cars and engines to the US,” he said.
Brazil was once production-competitive. Volkswagen, for example, exported the Voyage and the Parati (Gol saloon and estate derivatives marketed as the Fox) to the US and Canada in the 1980s and the fourth generation Golf in the 1990s.
Brazilian-built Fox models were sold in the UK and Europe from 2006-2012 until the entry level line was replaced by the European-built Up.
