Toyota is finalising plans for its first car plant in Mexico, according to the Reuters news agency, which added that approval could be given by the automaker’s board next month.
Sources told Reuters the plant would make the Corolla compact sedan with production starting at a US$1bn facility in 2019.
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This would end a three year expansion freeze imposed by the Toyota president, Akio Toyoda, who blamed the company’s aggressive expansion in the past for quality lapses.
Toyota is the last major volume carmaker without a production hub in Mexico which has attracted OEMs and suppliers with low labour costs and tariff free access to the US.
Recent new plants open or under construction include Mazda, BMW, VW’s Audi and a Daimler-Nissan joint venture while Nissan, in Mexico since 1966, has recently added an additional factory. The Mazda plant is scheduled to build a Mazda2 derivative under OEM contract for Toyota to sell as an entry level model in NAFTA markets.
The US is a big market for Toyota’s Corolla where about 340,000 were sold last year The Japanese company, however, does have a plant in Mexico’s Baja California that produces the Tacoma pickup truck.
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By GlobalDataReuters reported Toyota executives are considering a site in the central state of Guanajuato and are talking with local government officials over a potential plot of land that would give the automaker a big enough footprint to expand in the future.
A Toyota spokesman told the news agency: “We are always evaluating our production capacity in Mexico, and in North America generally, to keep it in line with local market demand, but no such decision has been made at this time.”
Toyota would be following Mazda which opened an assembly plant in Guanajuato early last year and in June last year, Daimler and Nissan announced plans to build a new US$1.4bn small car joint venture plant in Mexico.
With the car companies pouring in, vehicle production in Mexico doubled to more than 3m vehicles a year in the five years to 2014. With production capacity in the country, Japanese automakers avoid the risk of currency fluctuations and import taxes.
