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MEXICO: Toyota may announce pickup truck plant expansion today - paper

By just-auto.com editorial team | 15 August 2003

Toyota may announce an expansion of a light truck plant being built near Tijuana, Mexico, industry analysts said, according to a report in the Detroit News.

The paper said Toyota has scheduled a news conference for Friday at the Baja California factory, which the company last year said would cost $US140 million and build 20,000 Tacoma pickups and 170,000 truck beds a year. Mexico's president Vicente Fox and Toshiaki Taguchi, Toyota's North American chief executive, are to attend but company spokesman Dan Sieger reportedly declined to comment on the event.

"There are bigger plans for Baja than 20,000 Tacomas," Alan Baum, director of forecasting for the automotive industry consulting firm Planning Edge in Farmington Hills, told the Detroit News, adding: "Every time they've put a facility in it's been a starting point for something that's become much more significant."

The newspaper noted that Toyota, Japan's biggest vehicle maker, has said it wants to raise its global market share to 15% by the end of the decade from about 10%. This year, the company has announced capacity increases in North America including a new pickup plant in Texas and expansions of engine and parts plants in Alabama, California and Canada. Analysts estimate Toyota earns more than 80% of operating profit in the region, the report said.

"Toyota's investment in Mexico makes sense," Norihito Kanai, who helps manage the equivalent of $2.5 billion at Meiji Dresdner Asset Management Co., said, according to the Detroit News. "The company may be able to use the plant to supply cars to markets including Latin America."

The paper noted that the Baja California factory is Toyota's first vehicle assembly plant in Mexico. The car maker built 1.21 million cars and trucks and more than a million engines in the US and Canada in 2002, and expects to sell about two million vehicles in North America this year - Toyota estimates it will be able to build at least 1.65 million vehicles in North America by 2006, the report added.

"The Baja plant, the Texas truck plant, it's all part of a North American strategy that says we want to hit 15% market share," Sean McAlinden, an analyst at the Centre for Automotive Research in Ann Arbor, told the Detroit News. "In Baja they're going to need capacity of at least 60,000 units to recoup investment costs."