Toyota Motor Corp to build factories in China, Mexico
16 Apr 2015
Toyota Motor Corp plans to spend around $1.4 billion to build factories in China and Mexico, ending a self-imposed freeze on new plants, following the global financial crisis.
Production of a model yet to be named would start from 2017 in Guangzhou, China, according to the world's largest automaker. The new factory in Mexico's state of Guanajuato would start rolling out Corolla cars in 2019.
''An increase in production does not mean an undisciplined pursuit of more,'' president Akio Toyoda, 58, said in a statement from Tokyo. ''These investments will be an important test of Toyota's resolve and a measure of tangible improvement.''
Toyota is faced with a production capacity crunch after the president banned the building of new plants for at least three years. Expansion in the years leading up to the global financial crisis had led to its first annual loss in 59 years in 2009.
While Toyota was now expected to post a second-straight record annual profit, its position as No 1 in global sales was being challenged by Volkswagen AG.
Bloomberg quoted Jim Lentz, chief executive officer of Toyota's operation in the region as saying in a telephone interview that, it was sorely needed in North America. He added there was a little bit of capacity on some of the assembly lines but the company was reaching that peak.
The move would see the company join other automakers as they turned to Mexico to build and export vehicles.
The facility would employ 2,000 workers and produce up to 200,000 Corollas a year when it opened in 2019.
"We are thrilled to invest in North America so we can better meet the needs of our customers for decades to come," said Lentz.
As Toyota moved production of the Corolla south of the border, it would retool its plant in Cambridge, Ontario, where the Corolla was currently manufactured.
The Canadian plant would then be transformed to build a midsize vehicle that had yet to be named.
Toyota's move to Mexico had been expected as the automaker last year indicated it would resume its global expansion after a three-year halt to adding new plants.
The pause in increased production capacity even as Volkswagen continued its global expansion was one reason why the German automaker had closed the gap in sales between itself and Toyota, the world's leading auto manufacturer.
